The Most Powerful Women in Banking: Next

May 2021 | americanbanker.com

In a year that forced us all to reassess what’s important, roles that banks often take for granted — at branches and call centers, in human resources and marketing — stood out. THE MOST POWERFUL WOMEN IN BANKING: NEXT

COMMUNITY BANK RANKINGS p.30

INSIDE PAYPAL’S SUPER APP p. 34

TAKING ON FOOD DESERTS p. 40

Shaheena Khan BMO Harris Bank

0C1_ABM0521.indd 1 4/22/21 8:51 AM U.S. Bank celebrates the power of women, whose work drives results and advances excellence across our company and the entire financial industry.

We are honored to congratulate Anu Somani Achieve. on being named among the 2021 Most Influential Women in Payments: Next award and Angela Ratliff among the 2021 Most Powerful Women in Banking: Inspire. Next award. Elevate.

Anu Somani Senior Vice President Head of Faster Payments and Payment Innovation

Angela Ratliff Senior Vice President Global Head of Disputes and Prepaid Operations

Thank you to all the honorees for your remarkable impact and influence.

ABM_0521.indd 2 4/22/2021 4:02:19 PM Table of Contents

The Most Powerful Build your vegetables p. 40 Women in Banking: NEXT p. 10 Millions of Americans suffer from food insecurity, and Women make tremendous contributions to all facets millions lack access to sources of healthy, nutritious of the banking industry, but these 15 ascendant female food. But a decadelong state and federal effort to executives have made superlative efforts to navigate combat those problems is finally bearing fruit. their banks through difficult challenges.

Deposits & Withdrawals: Should banks offer universal family leave? p. 4

Paid family leave has significant benefits to families, and by extension to their employers. But the specific contours of a family leave policy are important.

Top 200 Community Banks p. 30 Teller’s Window: Belonging where you are p. 6 Community banks had a better year in 2020 than anyone might have predicted, thanks in large part to A 2020 survey by Coqual found that employees with federal interventions keeping asset quality from dete- a greater sense of belonging in their workplace were riorating and small banks’ role in distributing stimulus more loyal, dedicated and stayed longer. So who feels through the Paycheck Protection Program. like they belong, and how can managers make everyone feel like they belong?

Book Review: Divergence theorem p. 47

In her debut book, “Engine of Inequality: The Fed and the Future of Wealth in America,” longtime regulatory consultant Karen Petrou makes the case that the Federal Reserve’s post-2008 monetary policies have The bank killer p. 34 not only failed to reduce economic inequality, but are actively making a bad situation worse. Fintechs have been circling the banking industry for decades, but the online payments company PayPal is poised to be the first one that even the largest banks can’t compete against. Cover Photo: Sara Rubinstein

americanbanker.com May 2021 American Banker 1

001_ABM0521_001 1 4/22/2021 9:56:27 AM FROM THE EDITOR

Volume 131, No. 4 | americanbanker.com

Established 1836 One State Street Plaza, 27th ﬂ oor, New York, NY 10004 Phone 212-803-8200 By John Heltman Editor in Chief of American Banker Magazine John Heltman 917-456-6240 anking is often thought of as a numbers Contributors Laura Alix, Penny Crosman, Miriam Cross, Jim Dobbs, Kate Berry, Allissa Kline, Hannah Lang industry, where decisions are based on data

and abstract ideas. But the truth is, the data Executive Director, Brand Studio Michael Chu and models in banking all relate to people — Senior Designer Nick Perkins B Designer Joanna Yoon their preferences, their behaviors, their strengths and their aspirations. Editor in Chief Alan Kline 571-403-3846 This year’s Women in Banking — Next cover story Managing Editor Dean Anason 770-621-9935 Executive Editor Bonnie McGeer 212-803-8430 highlights 15 exceptional up-and-coming women in the Technology Editor Penny Crosman 212-803-8673 banking industry who embody that ideal of making the Washington Bureau Chief Joe Adler 571-403-3832 numbers and models work for their customers, their BankThink Editor Rachel Witkowski 571-403-3857 Community Banking Editor Paul Davis 336-852-9496 teams and their bottom line. Contributing Editor Daniel Wolfe 212-803-8397 A 2020 report by Oliver Wyman found that Digital Managing Editor Christopher Wood 212-803-8437 women make up just 20% of executive committees Copy Editor Neil Cassidy 212-803-8440 and 23% of board members in the ﬁ nancial services Reporters/Producers industry, though they make up just over half of the Laura Alix 860-836-5431 Hannah Lang 571-403-3855 U.S. population. While those numbers might be Kate Berry 562-434-5432 Brendan Pedersen 571-403-3878 discouraging, they represent a doubling of female Miriam Cross 571-403-3834 Jon Prior 214-629-5894 Jim Dobbs 605-310-7780 John Reosti 571-403-3864 representation since 2003, when they made up just Neil Haggerty 571-403-3837 Gary Siegel 212-803-1560 11% of both boards and executive committees. Allissa Kline 716-243-2679 Kevin Wack 626-486-2341

Expanding the representation of women at the ADVERTISING top of the banking industry critical for transforming VP, Media Sales Brad Bava 212-803-8829 banking into an industry where people can reach their Midwest/Southwest Shelly Schmeling 312-932-9392 West Sara Culley 831-438-8408 greatest potential. And these women are proving that Midatlantic/Southeast David Cleworth 843-640-3713 transformation is not only possible but essential. Senior Marketing Manager Jamie Billington 212-803-6099 One of the executives invited a youth art program to design and paint a mural around a bank branch Customer Service/Subscriptions [email protected] 212-803-8500 damaged during protests. Another steered their Licensing and Reuse of Content: Contact our o cial partner, Wright’s Media, for more information about available usages, license and reprint fees, and award bank through a di cult acquisition by examining the seal artwork at [email protected] or (877) 652-5295. Please note that bank’s portfolio line by line. Yet another transformed Wright’s Media is the only authorized company that we’ve partnered with for Arizent materials. their bank’s call center from a cost center to a source of revenue by automating some processes and developing a system to tailor workers’ conversations to better meet their customers’ needs. These innovative approaches and the many others CHIEF EXECUTIVE OFFICER Gemma Postlethwaite highlighted in this issue demonstrate the importance CHIEF FINANCIAL OFFICER Debra Mason CHIEF STRATEGY OFFICER Je Mancini of creating a culture of inclusivity at your bank. CHIEF CONTENT OFFICER David Evans Inclusivity is not a burden — besides being ethical, CHIEF PEOPLE OFFICER Lee Gavin bringing in leadership that looks like the world around American Banker (ISSN 2162-3198) Vol. 131 No. 4, is published 9 times per year; January/ February, March, April, May, June, July/August, September, October and November/Decem- us works better than the alternative. And it works ber by Arizent, One State Street Plaza, 27th Floor New York, NY 10004. Subscription price: $149 per year in the U.S.; $229 per year for all other countries. Periodical postage paid at because there is no one kind of person who has all the New York, NY and additional U.S. mailing o ces. POSTMASTER: send all address changes to American Banker, One State Street Plaza, New York, NY 10004. For subscriptions, renew- best ideas. The more inclusive a bank’s leadership, the als, address changes and delivery service issues contact our Customer Service department at (212) 803-8500 or email: [email protected]. Send editorial inquires and manuscripts better its chances of hitting on one of those great ideas to American Banker, One State Street Plaza, 27th Floor, New York, NY 10004. This publica- tion is designed to provide accurate and authoritative information regarding the subject — and these 15 women and their stories have proved matter covered. It is sold with the understanding that the publisher is not engaged in rendering ﬁ nancial, legal, accounting, tax or other professional service. American Banker is a registered that time and time again. AB trademark used herein under license. ©2021 Arizent and American Banker. All rights reserved. www.americanbanker.com.

2 American Banker May 2021

002_ABM0521 2 4/23/2021 2:20:58 PM Celebrating your passion and leadership

Kyla Stubbs SVP, Care Center Site Manager

Kyla, we’re proud to count you as a member of our team at PNC. And we’re proud of your business leadership, as well as your contributions to creating an inclusive, collaborative and innovative culture. Congratulations on your recognition by American Banker as one of the industry’s rising stars. And thank you for all you do for our company, our customers and the communities we call home.

CORP SPON PDF 0421-050-1821805

CORP SPON PDF 0421-050-1821805 American Banker_Kyla Stubbs_7x10 Ad_FINAL.indd 1 4/19/21 7:46 PM

Allowing workers paid time off for important family-related milestones and crises helps Should banks adopt universal family leave? families and makes for better workers. But the details make a big difference.

Karsten Vagner Ruth Martin Vice President, People Senior Vice President, Maven Clinic MomsRising

ur workforce is changing. As millennials impact LGBTQ+ families, and also hurt working mothers magine missing a baby’s first smile, or a parent’s core part of a common-sense care infrastructure people become the largest generation in the U.S. and impact family structures—perhaps for years to come. last breath. Not being able to hold your child’s hand take for granted. Their governments recognize the simple — and the largest group of new parents — In the past couple of years, many companies have during her chemotherapy, or help your spouse fact that working people have family responsibilities, Obenefits and policies have to adapt to their abandoned distinctions between “maternity leave” Iadjust to rehab or memory care. too. But that’s not the case here. Instead, paid leave is values in order to attract and retain the best talent. and “paternity leave” and instead delineate paid leave For 80% of working people in this country, those are both scarce and contentious here, and that causes great Research shows that millennials benefits by determining if the parent real possibilities because they have harm not just to families but also to want more than an office Ping- is a “primary caregiver” or “secondary no paid family leave through their businesses and our economy. Pong table or free lunch. They want caregiver.” Unlike “maternity leave” and employers. Sixty percent have no paid There has been some progress. substantive benefits, including those While primary “paternity leave,” primary caregiver medical leave to recover from serious Leaving the Six states — California, Massachusetts, that help them grow their families. In language has the pretense of gender illness through employer-sponsored New Jersey, New York, Rhode Island, a Care.com study, 83% of millennials caregiver neutrality, and therefore seems like disability insurance. So they come to question of Washington state — plus the District shared that they would leave their job policies don’t a more progressive and inclusive work, stressed and distracted, because whether to of Columbia have paid family and for one with better family and lifestyle framework. they fear losing wages or their jobs if medical leave insurance programs in benefits. A Deloitte study found that assign a However, primary caregiver they don’t; or they quit their jobs to provide paid effect. They aren’t new or untested; 50% of employed adults with access to gender to language is rife with its own recover from illness or care for a new family leave California’s was enacted in 2002 employer benefits said that if they were the employee, contradictions — what if you’re talking baby or seriously ill family member, and New Jersey’s in 2008. And paid given the choice, they would pick more to a same-sex couple? Or adoptive forcing employers to deal with turnover to employers family leave programs will take effect it assumes a parental leave time over a pay raise at parents? Or a heterosexual couple who and cover the high cost of recruiting leaves millions in Colorado, Connecticut and Oregon work. traditional and is striving for a more equal balance and training replacements. very soon. A large and growing body of There is a real opportunity to meet outdated of caregiving responsibilities? While Failure to provide basic paid without this evidence shows that these paid leave this growing segment of the workforce primary caregiver policies don’t assign leave has been a huge problem in this programs work well, both for working where they are, and paid family leave is family structure. a gender to the employee, it assumes a country forever. It’s become an even crucial benefit. people and for businesses large and one key place to do that. As we revisit traditional — and increasingly outdated more devastating problem during small, for women and men, and for local our policies, we need to be thoughtful — family structure where one partner the pandemic, which has sickened economies and our public health. about our approach, applying an equity assumes the majority of the caregiving millions and forced even more people At the federal level, last year and inclusion lens to ensure all families’ responsibilities lightly supported by the to take time off ot care for relatives with Congress passed the Families First needs are being met. other partner. COVID-19. Too many people have been forced to make an Coronavirus Relief Act, which included emergency paid 114 million people in the U.S. still don’t have access In some families, it may be easier to delineate primary impossible choice between the income they need and the leave benefits. Even though its loopholes left out more to a single day of paid family leave, but for the companies versus secondary caregivers. But as we know, modern families they love because they have no paid leave. Too than 100 million working people, those emergency that do offer paid leave, we often use language that families don’t all look the same. 78% of millennial families many employers have lost valuable employees they could benefits were linked to a reduction in the spread of excludes much of our workforce. Distinctions between are dual-career households, and will need to navigate the have retained. COVID-19 by as much as 400 reported cases per day. “primary caregivers” and “secondary caregivers” or right balance between working and parenting. LGBTQ+ The United States is the outlier in the developed world Yet in the face of fierce Republican opposition, Congress “maternity leave” and “paternity leave” disproportionately family-building is also on the rise. 77% of LGBTQ+ in terms of paid leave. In other countries, paid leave is a allowed the emergency paid leave benefits to expire — Continued on page 46 Continued on page 46

Teller’s Window Belong where you are

How important is it for banks to make their employees feel like they belong? A study performed by Coqual in 2020 found that respondents who reported a stronger sense of belonging in their workplaces also tended to Better work environment, better work report being more engaged in their work, more loyal to their organization and intended to stay longer than those Workers who felt a greater sense of belonging — whose co-workers and superiors contributed to a greater sense of who felt less included. But the results also showed that banks and other workplaces have a long way to go in belonging — also reported behaviors and attitudes conducive to high-quality work. Respondents who felt like they ensuring that their entire workforce feels that way. belonged in their workplace the most also reported greater senses of loyalty to their company and brand, more engagement in their work and were more likely to stay in their position long-term. Respondents who didn’t feel like Quantifying inclusion they belonged were far more likely to feel like their careers had stalled and to be actively looking for a new job. The study consisted of two nationwide surveys and online focus groups, and asked responds a series of questions to quantify their sense of belonging in their workplace. Each of those questions were meant to evaluate four aspects of belonging: feeling seen, feeling connected, feeling supported and being proud. The survey found that Key career indicators for professionals white men and white women reported the strongest senses of belonging, while Black and Asian women reported the weakest senses of belonging. 100% Other identities also showed strong corollaries with belonging as well. Veterans and LGBTQ respondents expressed stronger senses of belonging, while respondents born outside of the United States had weaker ties to Retention their workplaces. Baby boomers, extroverts and people who held similar political views also felt like they belonged Very engaged at their in their workplaces more than other groups surveyed. current job 80% Retention Professionals’ median belonging scores Intend to stay at their organization at least two years By race and gender White men 60% White women Black men Loyalty Latinx women Very loyal to their Employer brand organization Would recommend their Latinex men company as a good place to work Asian men

% of professionals % of 40% Black women Asian women

6.7 6.9 7.1 7.3 7.5 7.7 7.9 8.1 8.3 8.5 8.7

By age 20% Baby Boomers Career stall Feel stalled in their career Gen Xers Millennials

6.7 6.9 7.1 7.3 7.5 7.7 7.9 8.1 8.3 8.5 8.7 By community 0%

Veterans Quartile 1 Quartile 2 Quartile 3 Quartile 4 LGBTQ+ Born outside the U.S.

6.7 6.9 7.1 7.3 7.5 7.7 7.9 8.1 8.3 8.5 8.7

Source: Coqual

6 American Banker May 2021 americanbanker.com May 2021 American Banker 7 Not throwing away my shot

All U.S. adults became eligible for COVID vaccines in April, but surpluses in some areas suggest hesitancy could stall progress.

Photo: Bloomberg News

A look back at the biggest and most important stories and moments from the past month. To read the full articles, please Replay | May 2021 visit americanbanker.com.

Top Online Stories We simply believe “The fault line that [Ameribor] is for all this discord probably the best is a fraying alternative reference American Dream.” rate in the marketplace Jamie Dimon Photo: Bloomberg News News Bloomberg Photo: Photo: Bloomberg News News Bloomberg Photo: News Bloomberg Photo: Chairman and CEO at the present time, and JPMorgan Chase FDIC chief takes aim High Court favors Zions picks Ameribor so we wanted to make it News Bloomberg Photo: at legacy systems banks in robocall case to replace Libor known that we’re moving “What we’re Federal Deposit Insurance Corp. The Supreme Court unanimously Utah-based Zions Bancorp. forward with what we seeing now is Chair Jelena McWilliams said handed financial institutions a became the largest bank to adopt believe is the best an economy ... banks’ reliance on outdated lega- major victory in their fight against Ameribor over the Secured Over- at an inflection cy systems is her top concern. robocalling lawsuits. night Financing Rate. alternative to Libor. point.” Harris Simmons By Brendan Pedersen By Kevin Wack By Hannah Lang Jerome Powell Chairman and CEO April 14 April 6 April 15 Chairman Zions Bancorp.

Photo: Bloomberg News Bloomberg Photo: Federal Reserve Board

8 American Banker May 2021 americanbanker.com May 2021 American Banker 9 Most Powerful Women in Banking: Next

By Bonnie McGeer | May 8 | 40 Min Read

any of the 15 executives selected for our Most Powerful Women in Banking: Next list are in roles that took on outsize importance in a year punctuated by a global pandemic, economic free fall and widespread Mprotests over police brutality and racial inequality. Some manage human resources or marketing. Some oversee contact centers — whether for customers or employees. And some are involved in business lending, loan pricing or credit assessment. The use of prepaid cards spiked as states used them to distribute unemployment payments to millions of people suddenly out of work, and U.S. Bank’s Angela Ratliff, rising to the challenge, tackled the accompanying growth in fraud so well her duties expanded to include handling disputes across other products. One of Shaheena Khan’s employees was among the first at BMO Harris Bank to contract COVID-19, and her response became the playbook for the rest of the organization. Khan, a regional president who oversees retail banking in Minnesota and western Wisconsin, also has a branch close to where Minneapolis police killed George Floyd and where the protests heard around the world first ignited. She worked to make the damaged branch a symbol of hope and healing in the months of unrest that followed. Five of the women are from community banks, reflecting the heightened importance such institutions took on during the crisis, particularly with helping small businesses get access to emergency financial aid through the Paycheck Protection Program. Among them are Candice Caruso at WSFS Bank, Tiffanie Horton at LINKBANK and Jennifer Reissman at Seacoast Bank. Of those responsible for contact centers, PNC Bank’s Kyla Stubbs is overseeing a new one still gearing up in Texas and Ashley Garrison serves just Regions Bank’s 19,000 employees at hers. Both Stubbs and Garrison also have moderated some deeply emotional conversations for their co-workers following Floyd’s death. It ended up being an undeniable bonding experience that had participants feeling greater empathy and engagement — from the perspective of both women. “The conversation was raw, strained, awkward, emotional and fragile and is forever fixed in my mind as a transformative moment,” Garrison said. Stubbs, a veteran diversity and inclusion leader, came away more motivated than ever. “For as long as I can remember in my career, I have been involved in D&I councils in some role,” Stubbs said. “But I never felt more involved or engaged or passionate about diversity and inclusion than I did in 2020. What 2020 did for me specifically is challenge me to stop leading D&I on a surface level and to make sure we have programs in place with intentional D&I efforts.” Shaheena Khan Read on to find out more about all of the crisis-tested women on our 2021 Next BMO Harris Bank list — and get inspired. AB Photography by Sara Rubinstein americanbanker.com May 2021 American Banker 11 D&W | 4 TELLER | 6 REPLAY | 4 MOST POWERFUL WOMEN IN BANKING: NEXT | 10 Let’s secure your clients’ futures.

MassMutual, a company backed by 170 years of financial bonding with newborn daughter, Quinn Catherine, her first strength, is proud to introduce MassMutual Strategic child — Bell already knows where she is going to focus when she returns: social media initiatives. Distributors (MMSD)—a third party distribution partner offering Bell wants to use social media to educate retail one of the most diverse product portfolios in the industry. investors about the risk of “meme stocks,” a phenom- enon that has recently impacted shares of companies MMSD partners with firms and financial professionals to help like GameStop. She is dismayed that people who are not secure your clients’ financial futures. qualified ot give investment advice and don’t have a history of making calls on a stock have become so With our invaluable resources, more financial professionals are influential in ocials media. “I view those as our competitors from a content per- equipped with the right solutions at the right time. spective. It is incredibly concerning if people are listening to that and you have to have a strategy to combat that in a way,” Bell said. Securing futures together. She intends to beef up Ally Invest’s social media activity to help customers get better at sorting through the information deluge online for content they can trust. Lindsey Bell Before the COVID-19 crisis, Bell’s team had already Ally Invest Chief Investment Strategist completed plans for Ally Invest’s first digital conference, which was set for March 2020. The lockdowns only heightened interest among retail investors, who were looking for ome of the best opportunities can come from opportunities to learn, and thousands registered to attend. the most unfortunate circumstances, but it takes To meet the ongoing demand, Bell kept up with the the right person to see where the opportunities virtual programming. After George Floyd’s death at the are and then execute quickly before they pass. S hands of Minneapolis police sparked widespread pro- Lindsey Bell used her insight to help retail investors navi- tests last summer, Ally Invest hosted a behavioral finance gate the volatile stock market during pandemic lockdowns. expert for a virtual fireside chat, which Bell described as a “The timing was perfect to hit the ground running to “really great and raw” conversation. “We try to be on top of educate our customers about what was happening at the the topics that are driving financial markets, but also cul- time,” said Bell, who became the first chief investment ture because there is an intersection of the two,” she said. strategist at Ally Invest in September 2019. Another project Bell said she is proud of from the At the brokerage and wealth management arm of Ally past year was the volatility alerts she created. With a fresh Financial, Bell leads the team responsible for shaping the influx fo anxious retail investors trying to navigate the insight on investing and the global markets that is shared market gyrations, Bell had her three-person team start to with customers. Her team also oversees outreach, which quickly release alerts to help investors understand what entails creating educational content and events. was happening and why. The alerts get triggered by mar- The list of programming she has created or refined ket events such as the price of oil going negative and the is impressively long. One example is the weekly YouTube S&P 500 hitting a new record. “We inform our customers show “Stock Play of the Day,” which Bell works on with in real time and that is what I am most proud of. We have Brian Overby, Ally Invest’s options expert, and Callie Cox, a gotten such good feedback on it,” Bell said. — Marissa Fajt new addition to the team. Though she is on maternity leave through June – Nominating executive: Lule Demmissie, President Visit us at: massmutual.com/mmsd 12 American Banker May 2021

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At WSFS Bank, We Stand For Service.

Now, with PPP’s sunset in sight, Caruso has set to work writing the next chapter in small-business lending for Today, WSFS. Besides the PPP lending, WSFS originated Small Business Administration loans totaling about $63 million in 2020. Caruso’s goal in 2021: building on momentum We Stand generated over the past year to have her team perform at fintech speed while looking to serve businesses smaller than those WSFS had been targeting before the pandemic. “I was already in a state of mind that in banking, we need to move fast, we need to learn from fintechs,” Caruso For Skip. said. “PPP gave us a call to action. We tested things that would probably have taken a lot more time to get through Skip Schoenhals joined WSFS in November the vendor management and due diligence processes, 1990. His mission was to ‘save the bank’ and things that were already part of our delivery transforma- he did just that. Skip successfully fought for tion initiative, but maybe a little further out.” us to survive, led us to thrive and secured Caruso wants to extend that spirit of experimenta- Candice Caruso our independence. tion to the use of SBA Express, a program that lets select WSFS Bank Director of Government Guaranteed Lending lenders expedite loan approval. The lenders use in-house After 30+ years of dedicated service, Skip systems and underwriting standards and receive a 50% is retiring. His legacy lives in our history and loan guarantee from the SBA, which is lower than the 75% t fell to Candice Caruso, as director of government inspires our path forward. the agency typically provides on its regular loans. guaranteed lending, to spearhead implementation WSFS has traditionally targeted small businesses with A standing ovation and round of applause of the Paycheck Protection Program for the $14.3 two years of operating results. Caruso wants to explore for Skip on behalf of our Board of Directors, billion-asset WSFS Financial in Wilmington, Del. I using Express to serve smaller, early-stage firms. Associates, Customers and Communities. Caruso said she leveraged skills she’d honed launch- Expanding the national franchise-lending business at ing a startup business six years earlier to navigate the We are forever grateful to you and wish you WSFS is another possibility she is exploring. whirlwind as the COVID-19 crisis struck and the massive much happiness in your retirement. While Caruso said her career has always involved emergency federal program to help small businesses serving small-business owners, it hasn’t always included launched. “Being agile, being fast, studying and respond- lending. Caruso started at an actuarial firm ocusedf on ing quickly were all skills I had brought with me,” she said. employee benefits, then made what she described as a Caruso trained 200 people over a weekend to process “strategic pivot” in 2014, helping found Pango Financial, PPP loans and set to work building a portal to accept the which focused on small-business financing. flood fo applications that materialized almost immediate- Rodger Levenson WSFS recruited her to lead its government guaran- ly. WSFS would ultimately make more than 5,400 PPP teed lending operation in 2018. “It was a surprise,” Caruso Chairman, President and CEO loans totaling nearly $1 billion. The lending supported said. “I had interacted with WSFS in different community WSFS Bank about 100,000 jobs threatened by pandemic lockdowns. organizations while I was growing the business I started. Caruso recalled just trying to stay “in the moment,” What had happened is I developed a brand for myself rather than looking ahead, given how the Small Business within the community.” – John Reosti Administration program was evolving on the fly. “We really just had to build and respond as we got more information,” Nominating Executive: Richard Wright, Chief Retail Banking she said. Officer

14 American Banker May 2021 Member FDIC | wsfsbank.com

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TO DO LIST

Approve Alex’s Loan ‘Laura has a passion for self-im- provement, a relentless focus on the client and an emotional com- Schedule Appointment petency that supports a long and successful career as a banker.’ Gather Meeting Details — Michael Walker we were dedicated to the industry,” she said. Add to Calendar She also became the team’s Paycheck Protection Program loan expert last year, qualifying companies and shepherding them through the Small Business Adminis- Prepare Documents for Meeting tration’s application and forgiveness process. Laura Dodd She brings an extra dash of insight to her business City National Bank clients. Her late father owned a pest-control business in Send Reminder Commercial Banking Relationship Manager her hometown of Charlotte, N.C. She saw firsthand the influence that bankers had on her father’s success and the Meet & Send for Approval ithin her first week at City National Bank in ties that developed. 2018, Laura Dodd was working on her first “My dad had a very close relationship with his banker. deal — and the first deal for the aerospace He was a family friend and I just really appreciated that Schedule Document Signing and defense group that she was brought in close relationship,” said Dodd, who tries to forge similar W bonds with her own clients. “It feels less like work when to help launch. “I was not expecting to hit the ground running you’re able to have that kind of relationship.” Meet & Sign that fast. But it was a great opportunity,” said Dodd, After graduating from college, Dodd worked for 18 a relationship manager in commercial banking. months in the family business, which is now run by her two Los Angeles-based City National is often called the older sisters. But wanting to branch out on her own, Dodd “bank to the stars” due to its ties to the entertainment gravitated toward banking, one of Charlotte’s dominant industry. But the $75.8-billion-asset bank, a subsidiary industries. A job with Bank of America brought her to San of Royal Bank of Canada, has been expanding into other Diego, but not before she found one of her other passions: industries through a national corporate banking initiative. fostering rescue dogs. She spotted a dog running loose on The aerospace and defense group was the first with a the freeway in Charlotte and ended up fostering her with specific ocus,f and Dodd contributed to the success of the the help of a neighbor who ran a rescue group. business model, which became a template for the growth Dodd has fostered six dogs over the last several years Spend your time on what matters. of other corporate banking teams. The early deal helped and also has two of her own: Caerus, a 13-year-old pit bull/ prove it would work, said Dodd, the first relationship boxer mix, and a 2-year-old mutt named Rosarita. Take the busywork out of banking and speed up revenue generating manager hired in her group. She’s now part of a team of “It’s always a very comforting thing, for me at least, to opportunities. Seamlessly schedule, measure and manage customer and staff 10, consulting on financial trategiess to support business be able to spend time with dogs and play with them and interactions with the engagement platform built for ﬁnancial institutions. growth, recapitalizations, acquisitions and risk reduction. see the joy that they have, with even the smallest things,” Dodd has concentrated on setting the tone for how Dodd said. — Joel Berg the group interacts with clients and expanding its reach around the country. “It was really important to show that Nominating executive: Michael Walker, Commercial Banking Manager

16 American Banker May 2021

‘Kelly is one of the most effec- Employees — who had gotten an “ask” to listen to each other, regardless of any discomfort — came away tive, articulate, and hardworking feeling more connected, she said. colleagues I have worked with in “The conversation was raw, strained, awkward, my 21-year career at Comerica.’ emotional and fragile and is forever fixed in my mind as a — Peter Sefzik transformative moment,” Garrison said. Although she has been making a mark on the culture to be made. at Regions, Garrison did not set out on a career in human That led to a new full-time role for Gage, who is essen- resources. After college, she started in medical-device tially charged with figuring out how to translate executives’ sales and then moved to a sales job at a staffing firm. She vision into practical changes at the $83.6 billion-asset was calling on Regions when the bank offered her an HR bank. “Now I’ve got a team,” she said. “I’ve gotten to learn job, she said. Kelly Gage about more than just one business line.” Ashley Garrison Garrison started there as a generalist in 2008 before Comerica Among the initiatives underway: national dealer Regions Bank moving into a role as a liaison between HR and each of National Director Sales and Strategy, Commercial Bank services, one of the areas she has become familiar with, is Head of Human Resources Operations the bank’s business units, rotating, in turn, through wealth working to develop lending practices for young technology management, consumer banking and, finally, corporate banking. n March 2020, Kelly Gage went into a meeting at and life sciences businesses, which typically have yet to mployees at Regions Bank are increasingly com- She was promoted to head of HR operations in Octo- Comerica Bank and when she came out, the Federal report any revenue but have large venture capital backers. fortable with airing social and political views in the ber 2019, which put her at the forefront of the bank’s effort Reserve had cut its benchmark rate to zero in an “I work with our executive leaders and try and turn workplace. to respond to the pandemic not much later. emergency move to buoy the economy as the what they want they want to do from a leadership perspec- Nonetheless, Ashley Garrison worried about I Her job includes overseeing a contact center for tive into action,” Gage said. E COVID-19 virus swept across the country. a bankwide conversation about race that her human the more than 19,000 employees Regions has across 16 Gage set to work immediately to help rate-sensitive When the pandemic hit, Gage leaned on this “unique resources team was facilitating last summer in the after- states, and her team logged 150,000 separate incoming Comerica reprice loans and deposits. She handled mount- career trajectory” to help with the loan repricing emergency. math of George Floyd’s death at the hands of Minneapolis messages last year, double the 2019 volume. Questions ing questions around whether to include floor atesr on new “Her role determining pricing for Comerica has been police. ranged from “How do I get tested?” to “What time off is loans, what to do about new pricing targets, and decisions critical,” particularly when the Fed rate dropped to zero “This is one that I knew was going to be really hard available while my child’s day care is closed?” on waivers and deferrals for existing debt. “We had to overnight, said Peter Sefzik, the executive director over- for my team,” said Garrison, the head of human resources The team also documented employees’ COVID-19 make some choices quickly,” Gage said in an interview. seeing commercial banking at Comerica. “Her ability to operations at the Birmingham, Ala.-based Regions. cases, managed contact tracing and processed a 500% Gage started at Comerica’s vaunted credit analyst manage the uncertainty allowed the bank to succeed.” Her biggest worry was the potential disconnect increase in requests for leave compared with the previous training program when she joined in 2004. That early Comerica is still undergoing changes brought on by between employees who had strong reactions to what year, in part by building an automated system to stream- experience learning how to assess credit risk benefited the pandemic, and Gage is working to implement them, happened and those who might not relate to the deep line the leave communication and notification for affected Gage later on, when she moved into a relationship manag- like drawing up standards for how bankers work with cus- emotional impact others were experiencing. employees and their managers. Through it all, employees er role and was lending money to midsize businesses, the tomers over video. “What is this going to do to the team dynamics?” she reported in Gallup surveys that they felt cared for and Dallas-based bank’s bread and butter. In the long run, she’d like to revisit the credit analyst said, recalling her trepidation. “Is this going to be a con- heard. Gage took on an assortment of projects over the program where she started. She hopes to develop a new versation that brings us forward and closer or is this going “She was relentless in ensuring all of our associates years, including playing a pivotal role in Comerica’s “Gear generation of trainees with the same blend of skills in risk to be a conversation where someone has an opinion that were safe and treated with care,” said David Keenan, Up” initiative in 2016 to help get its expenses under con- management and relationship management that she offends, intentionally or not?” Regions’ chief administrative and human resources officer trol. She helped tailor day-to-day processes bankers had believes helped her. The effort started with a letter from John Turner, and Garrison’s boss. “Her work has resulted in the highest to follow in order to boost efficiency. “I’d love to continue to build this structure out and Regions’ president and chief executive officer, supple- levels of associate sentiment in our history.” — Joel Berg Then, Gage said, she was offered a role “on a little enhance that training program,” Gage said. — Jon Prior mented by information on the intranet. It was followed by project” the head of commercial banking had embarked team-level conversations led by the bank’s roughly 3,500 on. Comerica hosted a series of town halls to get input Nominating executive: Peter Sefzik, Executive Director, managers, who had been armed with information from an Nominating executive: David Keenan, Chief Administrative and from employees on what changes they thought needed Commercial Bank internal diversity, equity and inclusion team, Garrison said. Human Resources Officer

‘We are immensely blessed to work — which covered an exterior wall of the Lake Street branch — at a small, socially distanced gathering of em- have Tiffanie at the helm of the ployees, customers and community leaders in October. It credit function, helping build the has since been taken down so BMO can complete repairs bank from the ground up.’ to the branch, which reopened in August. But it will soon — Ray Chung have a new home with a local organization nearby.

LINKBANK is the latest venture for the team, head- ‘Shaheena is an inspiring, ed by Andrew Samuel, its chairman and chief executive strategic leader who builds officer. The bank, which had $424 million of assets at high-performing teams by year-end, was formed in 2018 from the purchase of Stone- fostering an environment of bridge Bank, a distressed institution in the Philadelphia learning and inclusivity.’ suburbs. A deal to acquire another bank, GNB Financial Shaheena Khan Tiffanie Horton Services, is expected to close this summer, pushing BMO Harris Bank — Carolyn Booth LINKBANK LINKBANK’s assets above $800 million. Head, Retail Markets, Minnesota Chief Credit Officer After the Stonebridge acquisition, one of the first and Western Wisconsin The mural is just one way Khan’s empathetic leader- orders of business was to comb through the portfolio of ship style has made a constructive difference at a difficult redit officers and relationship managers often time, said Carolyn Booth, BMO’s head of distribution for nonperforming loans and figure out which ones to save ike many other businesses in Minneapolis, BMO clash with each other over their work with U.S. personal and business banking and Khan’s boss. and which ones to sell. Harris Bank had to board up windows last sum- struggling borrowers. When one of Khan’s team members was among the first “We wanted to focus on growing the bank and not mer during protests over George Floyd’s death at But Tiffanie Horton, chief credit officer at at BMO to contract COVID-19, her response became the C dealing with troubled assets,” Horton said. the hands of police. the 3-year-old LINKBANK in Camp Hill, Pa., has found a Samuel said the asset sale, in December 2018, L playbook for the rest of the organization. But Shaheena Khan, who oversees retail banking in way to smooth over those inevitable disagreements by Inspired to work in the industry by an older sister who produced a gain for the bank and credited Horton with Minnesota and western Wisconsin for BMO, wanted its fostering good communication with relationship manag- had been a teller in college, Khan has spent her career in being instrumental to that positive outcome. “I think if you damaged Lake Street branch to send a better message ers and explaining how her recommendations can work retail banking and has held every branch role from part- talk to a lot of experts in our industry, they would not have than the one projected by the plywood. Khan felt the out well for both the bank and the customer. time teller to manager to personal banker. Having those expected that,” he said, declining to share the amount of branch should do its part to help foster hope and unity, “The tone with which one has the conversation is also years of branch experience helped inform how Khan led the gain. something she considered particularly important given its critical, as is listening to the full story and not jumping too her team through a year of pandemic and widespread civil Though essentially a startup, the bank began turning proximity to the site of Floyd’s death. quickly to a conclusion,” Horton said. unrest. quarterly profits in the second quarter of 2020. “We really thought, how do we change this message, It is a skill she said she picked up from a mentor, Jane Khan also is active in internal diversity and inclusion Over the past year, one of Horton’s key tasks had make a bold statement and share that with our communi- Tompkins, an executive at the first bank where Horton efforts, inviting bankers to share their stories and organiz- been overseeing the bank’s certification as a Small Busi- ty?” she said. “We wanted to not just be a business worked, the former Waypoint Bank in Harrisburg, Pa. “Jane ing fireside chats. Companies cannot merely hire diverse ness Administration lender, so it could take part in the that boards up to protect our branch, but to say, ‘We’re did that really well,” Horton said. employees and hope for the best, without taking steps to Paycheck Protection Program. with you.’ ” Tompkins, Waypoint’s chief credit officer, offered actually create a more inclusive culture, Khan said. She has also made an extra effort to support other Khan connected with local nonprofits and eventu- another crucial example for Horton, as a woman in a “What do you do when you hire the individuals? Do women at the bank as they cope with the strains of work- ally partnered with Juxtaposition, an all-Black youth art leadership role. “I admired the way she was able to juggle they have a mentor? Do they have a relationship with ing remotely while balancing their personal lives. program whose students created a mural for the branch being a mom and being an executive,” said Horton. someone who can be a sponsor?” she said. “It’s having the “I think to be a manager you have to have a relation- using a combination of spray paint and acrylic paint on Horton has two sons, ages 10 and 8, and has done individual be set up for success versus checking the box ship with your employees and they have to feel valued a canvas. plenty of juggling of her own as part of a team that has and filling this diversity quota.” — Laura Alix and know that you support them both professionally and Measuring 20 feet wide by 8 feet high, the mural is grown and sold several banks over the past two decades, personally,” Horton said. — Joel Berg meant to represent the city of Minneapolis in vibrant reds, including Graystone Bank in Pennsylvania and Sunshine Nominating executive: Carolyn Booth, Head of Distribution, blues, pinks and greens. The bank unveiled the public art- U.S. Personal and Business Banking Bank in Florida. Nominating executive: Ray Chung, Chief Culture Officer

Ogan said she asked branch managers to select ‘Her passion is as palpable as people based on personality and leadership potential, not job title. The 20 representatives — all of them turned out it is limitless. I told her recently to be women — ranged from a part-time teller to a branch that she has a high degree of operations manager. ‘just gives a darn,’ about her work, The effort to overhaul the retail strategy yielded the bank and our customers.’ success on multiple fronts, including spurring a better-than-expected increase in consumer and business — Scott Lippert deposits, which rose by $39.3 million in 2019, Ogan said. area that had been facing regulatory scrutiny prior to And it led to a digital training initiative in 2020 that result- her arrival. ed in improved cross-selling and customer service. The work she did to tackle fraud during the pandem- The 20 reps, meanwhile, have come to serve as a ic led to yet another new challenge: her appointment in crucial sounding board for Ogan when the bank mulls November as head of U.S. Bank’s newly created global other initiatives, such as a recent debit-card conversion. disputes function, which consolidates disputes operations “We realize that anything we do at the corporate level is for a range of products. never going to succeed unless you have that buy-in at the The move is designed to improve the way disputes Lindsey Ogan branch level,” said Ogan. Angela Ratliff are handled by sharing best practices between product U.S. Bank Great Plains Bank She also jumped on the idea of connecting this group lines, Ratliff aid.s Chief Growth Officer Global Head of Disputes and Prepaid Operations of women and empowering them to become future lead- “That also allows us a little bit of flexibility in our staff- ers by providing mentorship and hosting retreats. Over the ing,” she added. “If one area is up and another is down, we last two years, the group has been among the most-pro- can shift and cross-train.” he numbers were showing a disconnect between ngela Ratliff describes herself as someone who moted at Great Plains, despite the added workload of the To familiarize herself with the operation, Ratliff has the expense for a marketing campaign and the goes where the problems are. As head of U.S. volunteer role. been listening to calls and reading through customer results for Great Plains Bank in Oklahoma City. Bank’s prepaid card business in early 2020, she Ogan’s own experience as an openly gay woman communications. Normally, she would spend time with Lindsey Ogan, then the bank’s marketing did not have to go far. T working for a rural community bank has made her more A employees face to face as well, but the pandemic has director, wanted to know what was going on. “It just makes The COVID-19 pandemic drove tremendous growth attuned to those who might otherwise be overlooked. “I meant a shift to working with them remotely and sharing me crazy when we spend money and I can’t prove a result in the use of prepaid cards, as states were using the cards definitely feel I have something to contribute to the con- screens. from it,” said Ogan. to make unemployment payments to millions of people versation about diversity in the workplace and challenges Although working from home is less than ideal given She ended up visiting all 20 of the bank’s far-flung suddenly out of work. faced by those who don’t fit the ypicalt mold of corporate the task at hand, it was welcome in the early days of the branches, which made clear what the trouble was. Branch The growth, however, was accompanied by a spike in America,” she said. pandemic, said Ratliff, who has two daughters, ages 5 and employees were not up to speed on what they needed to fraudulent unemployment claims. Ogan is used to throwing things at the wall to see 3. They occasionally sat on her lap during video meetings, know to sell new products and convert new customers, Ratliff alliedr her team and dug into the root causes of what sticks. As a child, she was always on the lookout for which, Ratliff aid,s helped make other employees more said Ogan, who was promoted to chief growth officer in the problem. entrepreneurial opportunities. A drummer, she once came comfortable with tending to their personal lives when January 2020. “If I see something that needs to be fixed, I tend to up with a cymbal-cleaning service that she pitched to needed. Her solution was not just a matter of education and just gravitate toward it,” she said. churches. “I did have people reach out to me to say, ‘Thanks for training. She recruited a representative from each of the That quality led to her recruitment in 2017 by Jim After high school, she studied entrepreneurship at letting us see that,’ for saying, ‘It’s OK,’ ” said Ratliff, who is bank’s branches to help lead the charge. Thompson, now chief risk officer at the $554 billion-asset the University of Oklahoma and landed in banking soon expecting a son in June. “We knew doing this retail strategy shift would be a U.S. Bank, Ratliff aid.s “Even if I didn’t necessarily have the after, which unexpectedly proved to be a fit. “You kind of “I do think it’s important for leaders to model the massive change,” said Ogan. “And you can’t do that and experience on paper, he knew my skill set and said, ‘You learn that, with anything, business strategy is business behavior that we talk about.” — Joel Berg sustain it over the long term without a doggedly, stub- can do this. You’re capable.’ ” strategy,” she said. — Joel Berg bornly positive person who would keep going despite the Her first challenge at U.S. Bank involved strengthen- Nominating executive: Scott Lippert, Executive Vice President, resistance to change that every organization faces.” ing the financial crimes function for payments, an Nominating executive: Mark Russell, Chief Executive Officer Payment Services Operations

Fla.-based bank as a vice president overseeing retail strat- ‘Kyla has created a culture egy. Two promotions later, she’s chief marketing officer. where people want to work She learned the balanced scorecard approach and the clarity and focus it brings while working at GE Capital, for PNC,and customers feel before joining Seacoast. “Banks have so many financial welcome and respected.’ ratios and financial metrics that we hold ourselves ac- — Cedric McDonald countable to,” Reissman said. “It was more like, ‘What are the most important ones?’ And then how do we make sure McDonald, PNC’s customer service and support director. that we’re communicating those metrics in a way that Her team’s Net Promoter Score for the second-quarter every associate will understand.” led the results across all PNC contact centers in both the Reissman brought a similar level of focus to the “place to work” and “products and services” categories. bank’s call center. Within her first two years at Seacoast, Widespread protests over the police killing of George she helped to transform it from a cost center into a Floyd in Minneapolis last summer proved to be another Jennifer Reissman revenue driver, propelling the culture change that was Kyla Stubbs big challenge for Stubbs, a veteran diversity and inclusion Seacoast Banking Corp. of Florida PNC Bank needed to shift away from a purely operational focus to leader. She described the volatile and emotional time as Chief Marketing Officer Care Center Site Manager incorporate a more proactive approach to sales. Market- an opportunity to engage with many people and make a ing automation and lead generation now help employees difference, both professionally and personally. orget rose-colored glasses. For Seacoast Bank, yla Stubbs was anticipating a highly challenging tailor their conversations to a customer’s needs. Stubbs began moderating conversations with hun- things are at their best when tinted in teal. 2020 well before the pandemic hit. She had Reissman said she surprised even herself when dreds of employees over the sensitive subject of race rela- Besides being the bank’s corporate color, teal moved from Ohio as the year began, to open volunteering to take on the work at the call center, which tions. She said diverse teams openly shared their feelings, has turned into a defining element fo a scorecard PNC Bank’s first Texas customer care center. F was outside the scope of her marketing experience. “It K resulting in heightened empathy and engagement among system that Jennifer Reissman spearheaded when she She already knew it’d be a big effort to recruit 560 people was the single most challenging year of my professional coworkers. arrived at Seacoast in 2014. in a market where nobody had heard of PNC before. career, but it really got me connected to the intricacies of “For as long as I can remember in my career, I have “We use red, yellow, green, in terms of tracking our But the pandemic forced her to rework the strategy our business,” she said. been involved in D&I councils in some role,” Stubbs said. internal goals; and then if we’re 110% above, we use teal, entirely. The new 60,000-square-foot office that she over- That earlier call center effort proved particularly help- “But I never felt more involved or engaged or passionate because teal is our signature color,” she said. “So we sees in New Braunfels will remain empty through 2021, as ful last year as Seacoast scrambled to ramp up communi- about diversity and inclusion than I did in 2020. What make a big deal about if you’re in the teal, or this team just her recently hired staff she’s( gotten about halfway to the cation around the Paycheck Protection Program. Anxious 2020 did for me specifically is challenge me to stop turned teal, in terms of performance.” full headcount) continues to work remotely. small-business owners flooded the phone lines with leading D&I on a surface level and to make sure we have Though Reissman concedes that the color-coding “It has definitely been a whirlwind, but I am having questions, and Reissman’s team was able to track those programs in place with intentional D&I efforts.” might sound silly, the program itself is anything but. It has fun,” Stubbs said, noting that her previous experience as interactions and adjust messages across all marketing Still, the biggest moments of awakening for her came been so successful in aligning employees with defined virtual customer care leader helped her smoothly tran- channels on the fly. at home. Stubbs, the mother of two, said she realized she goals, that it remains a regular part of monthly strategy sition the Texas operation to the bank’s digital customer In her seven years at the $8.3 billion-asset bank, it has needed to talk more about race with her own children updates to this day. The updates consist of PowerPoint service platform. “We had really big aspirations to get successfully completed 10 acquisitions, including two last after the “Black Panther” actor Chadwick Boseman died of slides that illustrate how each of the bank’s divisions is boots on the ground recruiting, and we had done two hir- year amid the pandemic. Reissman led the integration and cancer. When her 8-year-old daughter heard about Bose- performing — which the color-coding makes clear at a ing events prior to social distancing being put in place.” rebranding efforts on those two acquisitions — First Bank man’s death, she assumed he had been shot. “I thought glance. Once the March lockdowns went into effect, Stubbs of Palm Beaches and Freedom Bank — with the same my kids’ views were the same as mine,” Stubbs said. “I re- “The key was collaborating across the leadership quickly made the call to go fully virtual so the May 11 open- speed as ever. “We’ve always fully converted customers alized at home my conversations weren’t enough. I hadn’t team to align on the top 10 to 15 metrics across our key ing deadline would still be met. onto our systems and completed all rebranding on day talked about the importance of feeling proud, despite all stakeholder groups — our shareholders, our associates While it was far from an ideal situation, the results one,” she said. — Matthew de Paula the imagery and headlines, of how they are as individuals and our customers — and then pick the most important posted at the new call center are impressive and, in Cedric and who we are as people.” — Marissa Fajt things for our associates to know about for us to message McDonald’s view, show that Stubbs was the right choice consistently,” said Reissman, who started at the Stuart, Nominating executive: Chuck Shaffer, Chief Executive Officer for her position. “She has done a phenomenal job,” said Nominating executive: Chuck Shaffer, Chief Executive Officer

ago. “Shannon started as a teller and is now fully running retirement-eligible,” she said, noting that the average the human resources department as managing director,” retirement age of Wells advisers is 69. said Brabble, who recognized Sutton’s potential early on The idea behind succession planning is that, when and cultivated her talent. Sutton recalled how Brabble advisors retire, they typically want to sell their businesses, encouraged her to pursue stretch assignments that while the companies where they work want to hang on broadened her skills and led to multiple promotions. to those clients and their assets. Through a succession program, a younger adviser can buy the retiring adviser’s ‘Shannon has endless potential. business, helping solve the company’s retention challenge. She inspires others each and Ta’s twist on this industrywide idea was to move Wells beyond just facilitating the transaction between every day.’ the younger and older adviser, Karanik said. Instead, she — Kristen Brabble designed a program where Wells would essentially buy the retiring adviser’s book of business on behalf of the young- Leading the human resources department for any bank er adviser, who would have to earn it by staying with the Shannon Sutton is no easy task, especially during a pandemic, Brabble Kimberly Ta company for 13 years. First, the two advisers would team First Carolina Bank said. Yet Sutton continually goes beyond her daily work — Wells Fargo up for about three years, working together on accounts so Managing Director, Human Resources such as collaborating with business line leaders to create Head of Financial Adviser Integration that the clients developed a relationship with the younger a new market reporting process — to find creative ways to adviser. Then, when the older adviser retired, the clients t the start of the pandemic, Shannon Sutton support employees and keep them engaged, she said. hen Kimberly Ta brought a new plan to would be more likely to stay with Wells. jumped into action to help keep employees at Sutton is interested in holistic well-being, which boost adviser retention to her boss at Wells “Ultimately, the client always has the choice, but First Carolina Bank safe. As the managing helped inform one of her most recent initiatives. A well- Fargo Advisors, Erik Karanik, two years ago, we’ve found with that one-year-to-five-year warm handoff, director of human resources, she worked with ness challenge she implemented for 2020 gives employ- he initially turned her down. you can really retain that client,” Karanik said. A ees two goals each quarter, one focused on physical health W Any Wells adviser nearing retirement can sign up; the executive team to create a list of protocols. Wells already had what Karanik considered a robust But before rolling everything out across all six of the (such as drinking water or walking) and one focused on succession-planning initiative, with 89% of financial ad- a junior adviser needs only to be registered to be in the $934 million-asset bank’s branches, Sutton asked her own emotional health (such as meditating or taking a 15-min- visers who went through the program staying on. But Ta, a program. employees to weigh in on what they needed to navigate ute break each day). two-decade Wells veteran, saw a pattern in the data: When Wells’ diversity-recruiting efforts have benefited the COVID-19 crisis. Their answers changed her approach. “We designed this program specifically for our people. a young Wells adviser participated in the program to take because advisers themselves don’t have to source their “The biggest thing that we can do for people is listen So this isn’t going to work if you take it to the bank down over the business of a retiring adviser, they typically stayed own successors, opening doors for candidates who might to their concerns and preferences,” Sutton said. “After we the road and ask them to implement it,” said Sutton, who until they were done paying for the business — and then not have previously received a chance to buy an advisory came up with this list, we presented it, and the end result is pleased that employee participation keeps climbing. they left, at a rate three to four times higher than average. business. “When the firm is putting up the apitalc to do the was that we scratched off about half fo it.” “As they see their fellow co-workers having fun with these The problem was all the more acute because Wells was financing, that’s one less barrier to unconscious bias on While the protocols were intended to maximize safety, challenges, we’re seeing the numbers go up every week.” losing hundreds of advisers a year overall at that point. the part of the seller — who is more often than not a white they also stood in the way of employees who were trying Sutton also led the charge on creating a culture Ta showed these figures to Karanik and proposed a man,” Ta said. to do their jobs well, Sutton said. For example, putting committee to bring employees together with virtual events revamp of the succession-planning process, eventually For Karanik, watching Ta get the Summit program plexiglass around the teller stations actually prompted amid the stress and isolation of the pandemic. She said winning his approval in 2019 to launch the Summit started brought to the fore what he considers the core employees to walk around when working with customers employees appreciate these opportunities to socialize. program, which now encompasses 1,200 financial of her leadership skills: active listening, creative problem on paperwork. The barriers were removed and a limit of Her overall goal, as she sees it, is to build “a culture of advisers with assets producing more than $1 billion solving, and a capacity for hard work. two customers at a time was imposed instead. “It’s the lit- encouragement.” in annual revenue. “I look forward to working for her someday,” he said. tle details that we as leadership don’t think about because “Your company is only going to be as strong as your The retirement cliff ausesc a concentrated business — Chana R. Schoenberger we’re not doing that day-to-day job,” she said. least-satisfied eamt member,” Sutton said. — Alyssa Place risk for Wells, said Ta, now the head of financial adviser Kristen Brabble, First Carolina’s chief operating offi- integration. “Seventy-five percent of our revenue as a Nominating executive: Barry Sommers, Chief Executive Officer, cer, was a branch manager overseeing Sutton nine years Nominating executive: Kristen Brabble, Chief Operating Officer company is being managed by people who are already Wealth and Investment Management

‘Initiative, boldness, diplomacy carbon emissions targets. Younger’s recent work continues to build on that and a zeal to pioneer difficult success. In December, the Houston-based U.S. arm of projects are woven into Abby’s the Spanish banking giant Banco Bilbao Vizcaya Argen- personality.’ taria was the sole coordinator and joint lead arranger on a $3.5 billion sustainability revolver agreement with the — Jim Vogel rental-home builder Invitation Homes. The ongoing rate That early success led to Urtz’s involvement in a for the facility is tied to an independently validated ESG series of other high-profile initiatives in the years since. benchmark. She now leads the Digital Engagement Project, which FHN describes as a strategic component in its future. ‘Cara has consistently demon- The project includes the comprehensive redesign of strated a level of creativity and Abigail Urtz Cara Younger the primary website for its fixed-income dealer. Used by FHN Financial BBVA USA leadership that will drive her Senior Vice President of Credit for thousands of financial institutions as a primary source for Executive Director, career on a path to the C-suite.’ Municipal and Corporate Bonds economic updates and real-time portfolio analysis, the Syndicated Finance Origination site is also an essential tool for FHN employees handling — Michael Adler the investment needs of clients. ince 2019, Cara Younger has led the structuring bigail Urtz started working for FHN Financial “It is the largest infrastructure redesign at the firm in of a new product for U.S. corporate clients of A similar arrangement was announced in April for the just as the 2008 financial crisis hit and the more than 15 years,” said Jim Vogel, manager of the inter- BBVA: the sustainability-linked revolver. Maryland-based real estate investment trust American municipal bond market began to unravel. est rate strategies group and Urtz’s boss. In other words, corporate borrowers Homes 4 Rent. AMH amended an existing revolver agree- The collapse of the monoline insurance S A Historically, the website served as a repository for are offered an open line of credit with a rate that varies ment with BBVA to introduce sustainability standards and companies left many bonds worthless, and some banks documents and PDF reports, but none of it was dynamic. depending on whether they achieve the environmental, boost the facility’s size to $1.25 billion. were unaware they were suddenly holding very low-rated Urtz wants to change that. social and governance goals outlined in the loan agree- “A lot of my job is marketing and trying to find aysw debt, even, in some cases, below investment-grade. “We want to make it a more interactive and ment. “It’s greenhouse-gas emissions intensity, or water to provide value to the client,” Younger said. “So it’s not “Banks were at a loss at how to understand muni engaging site where people can slice and dice the usage, recycling for consumer products, things like that,” just providing a revolver commitment, but bringing in credit — the thousands of issuers, the idiosyncratic nature data as a value-add for their business,” she said. said Younger, the New York-based executive director for new ideas, which is where the sustainable lending piece of the muni market,” Urtz said. Under Urtz’s leadership, a key piece of the project, syndicated finance origination. comes in.” So when the Dodd-Frank Act required banks to look the inventory management system, was ready in Novem- Borrowers receive better pricing by meeting or sur- Before joining BBVA, which is selling its U.S. oper- past the ratings to evaluate their municipal securities and ber, and the final phase is on track to be completed in the passing goals, said Younger. But they could be penalized ations to PNC Financial Services Group in Pittsburgh, other investments, Urtz saw an opportunity to help. fourth quarter of 2021. in the pricing for falling short — “if emissions increase Younger was a corporate loan structuring specialist at GE Drawing on her skill in advanced database manage- Technology aside, Urtz said the human element still beyond the agreed upon levels, for example.” Capital, her initial job out of college. She has degrees in ment and her deep understanding of this market, Urtz matters in the industry, so much so that she considers au- Younger has worked the last eight years (two as exec- finance and international relations from Michigan State. spearheaded the development of a proprietary ranking thenticity to be the most important leadership quality. It is utive director) on syndicating a range of commercial loans Younger, who has two children, ages 4 and 5, enjoys system for municipal credit. The system she designed was key to building crucial connections with people, she said. in both investment- and speculative-grade, for a variety of following the sports teams of her alma mater. “I’m a huge subsequently used as a template for a similar one that “I’ve believed in this quality for many years, but I’ve major corporate and middle-market clients. Spartan sports fan,” said the third-generation Michigan FHN’s credit strategies group developed for corporate never felt its importance more than I do now,” she said. BBVA executives credit her with leading efforts to State alum, who also has some sports experience of her bonds. “When things are changing and the future feels uncertain, use financing ot help spur customers to achieve their own own playing basketball, volleyball and softball. “That was The initiative has yielded enduring brand loyalty for people want to follow a leader with values and a story they sustainability goals. Her work was crucial to the comple- high school and then intramural sports after that,” she FHN, a division of First Horizon Bank that has an average believe in.” — Lynne Funk tion of one of the first such deals in the country in 2019 — said. “I wasn’t D-1 material.” — Glen Fest daily trading volume of $5 billion and works with 4,700 and the largest one executed up to that point. She helped institutional clients globally, including about half of all establish a $2.5 billion revolving line of credit used by U.S. banks. Nominating executive: Jim Vogel, Executive Vice President and Nominating executive: Michael Adler, Head of U.S. Corporate and Manager of the Interest Rate Strategies Group Avangrid, a Connecticut-based energy company, to meet Investment Banking

3-Year Net Demand NPAs/ Total Net Total Nonint Revenue Efficiency Avg. ROAE ROAA Interest Deposits/ Total Rank Institution/Ticker Location Assets Income Income Growth Ratio ROAE (%) (%) Margin Total Dep. Assets ($000) ($000) ($000) (%) FTE (%) A ‘better than expected’ 2020 (%) FTE (%) (%) (%)

29 Santa Cruz County Bank (SCZC) Santa Cruz, CA 1,422,872 14.61 10.98 1.36 17,550 4,213 37.7 1 46.45 3.99 8.40 0.00 30 Redwood Capital Bancorp (RWCB) Eureka, CA 498,111 14.50 13.36 1.00 4,405 3,843 14.85 59.48 3.63 7.43 0.29 Asset quality improbably improved last year at the best-performing U.S. 31 Timberland Bancorp (TSBK) Hoquiam, WA 1,588,405 14.47 13.63 1.69 24,907 17,788 4.71 48.70 3.68 5.91 0.37 community banks, with an assist from the Paycheck Protection Program 32 High Country Bancorp (HCBC) Salida, CO 365,182 14.41 13.92 1.44 4,774 5,028 21.65 61.86 5.03 55.46 0.02 33 Integrated Financial Holdings (IFHI) Raleigh, NC 396,539 14.37 12.03 2.43 8,714 33,506 55.69 69.35 4.70 28.23 2.60 34 LifeStore Financial Group MHC (LSFG) West Jefferson, NC 377,164 14.37 15.77 1.69 5,693 11,632 15.11 63.26 2.87 22.27 0.72 By Jim Dobbs 35 Bank of South Carolina Corporation (BKSC) Charleston, SC 532,495 14.22 11.96 1.29 6,461 3,395 0.41 57.42 3.52 10.53 1.31 36 Valley Republic Bancorp (VLLX) Bakersfield, CA 1,236,010 14.11 14.46 1.12 12,530 2,428 22.51 47.95 3.19 23.29 0.33 37 Community Bancorp. (CMTV) Derby, VT 918,233 13.82 13.48 1.32 10,759 6,772 12.86 58.31 3.68 14.67 0.53 38 CSB Bancorp (CBMI) Chelsea, MI 379,038 13.74 11.76 1.33 4,715 839 4.79 60.46 3.38 6.27 1.08 ven as the coronavirus pandemic was upending Shortly after virus outbreaks took hold in March 2020, 39 Peoples Limited (PPLL) Wyalusing, PA 443,640 13.73 12.63 1.26 5,200 4,593 17.98 57.61 3.19 31.47 0.17 the U.S. economy, the nation’s top-performing the industry braced for loan losses by building reserves and 40 Fentura Financial (FETM) Fenton, MI 1,251,343 13.70 14.05 1.29 15,464 18,712 36.57 58.33 3.50 13.07 0.64 small banks managed to grow their top and bottom slowing traditional lending. 41 Crystal Valley Financial Corp. (CYVF) Middlebury, IN 682,561 13.62 14.33 1.71 11,167 6,293 14.84 55.74 3.99 3.28 0.73 42 Benchmark Bankshares (BMBN) Kenbridge, VA 870,825 13.56 14.04 1.32 10,219 7,467 7.34 65.45 4.25 25.88 0.35 lines in 2020 while keeping costs in check and loan But the industry’s worst fears were eased by Federal 43 First National Corporation (FXNC) Strasburg, VA 950,932 13.49 10.92 0.98 8,858 8,185 2.99 62.52 3.50 27.23 0.71 E 44 Citizens Financial Services (CZFS) Mansfield, PA 1,891,674 13.40 14.21 1.46 25,103 11,158 26.07 51.00 3.92 NA 0.94 losses to a minimum. Reserve stimulus, elevated government aid and programs “The main takeaway is that the industry did much that let businesses and households defer monthly 45 Redwood Financial (REDW) Redwood Falls, MN 470,858 13.40 17.43 1.81 7,467 9,192 34.03 54.95 3.62 59.26 0.14 46 American Bank Incorporated (AMBK) Allentown, PA 734,500 13.20 13.11 1.34 9,423 2,457 12.85 44.32 3.05 9.90 0.73 better than most expected last March,” said Claude Hanley, payments. Importantly, the Small Business Administration’s 47 Mountain Commerce Bancorp (MCBI) Knoxville, TN 1,109,970 13.19 10.45 0.93 10,170 2,267 19.71 43.23 3.39 23.64 0.16 a partner with Capital Performance Group. Paycheck Protection Program helped stave off business 48 Landmark Bancorp (LARK) Manhattan, KS 1,188,027 13.12 16.70 1.77 19,493 24,939 32.70 57.6 5 3.72 25.96 1.20 49 Northeast Bank NBN) Lewiston, ME 1,234,092 13.12 17.42 2.25 29,064 13,324 12.89 53.05 5.14 7.7 9 4.62 Hanley and his team compile the data for American failures and, in turn, loan losses. I 50 Wayne Savings Bancshares (WAYN) Wooster, OH 591,591 13.05 13.39 1.25 6,690 3,038 6.40 52.96 3.34 16.43 0.40 Banker’s annual ranking of the top 200 publicly traded “The relief programs were critical,” said Emma Metzler, 51 PB Financial Corporation (PBNC) Rocky Mount, NC 586,559 13.00 12.13 1.24 6,808 1,119 1.78 45.02 3.52 3.08 0.33 banks and thrifts with less than $2 billion of assets. And a senior analyst at Capital Performance Group. 52 Community Financial Group (CFGW) Spokane, WA 615,339 12.80 12.58 1.23 6,516 9,110 9.43 69.73 3.91 49.88 0.01 53 Golden Valley Bancshares (GVYB) Chico, CA 406,324 12.76 12.87 1.03 4,093 1,064 24.04 54.69 3.50 NA 0.00 last year, against all odds, “asset quality actually got better,” Below is a list of the top 200 publicly traded banks and 54 Meridian Corporation (MRBK) Malvern, PA 1,720,197 12.75 21.37 1.78 26,438 85,573 100.34 68.96 3.39 9.50 0.65 Hanley said. thrifts with less than $2 billion in asssets. 55 Trinity Bank N.A. (TYBT) Fort Worth, TX 378,106 12.69 11.74 1.32 4,716 539 12.40 48.95 3.42 23.67 0.07 56 Home Loan Financial Corporation (HLFN) Coshocton, OH 248,353 12.68 11.99 1.53 3,642 2,305 3.78 51.75 3.86 16.40 0.73 57 Hawthorn Bancshares (HWBK) Jefferson City, MO 1,733,731 12.65 11.74 0.88 14,293 14,649 17.75 64.87 3.48 27.64 2.86 58 BEO Bancorp (BEOB) Heppner, OR 666,772 12.61 14.08 0.93 5,523 3,122 12.73 73.46 4.97 58.13 1.35 3-Year Net Demand NPAs/ Total Net Total Nonint Revenue Efficiency Avg. ROAE ROAA Interest Deposits/ Total 59 Farmers Bancorp (FABP) Frankfort, IN 710,919 12.61 11.50 1.37 9,147 6,576 6.36 56.30 3.72 8.36 0.30 Rank Institution/Ticker Location Assets Income Income Growth Ratio ROAE (%) (%) Margin Total Dep. Assets ($000) ($000) ($000) (%) FTE (%) 60 Commercial National Financial Corp. (CEFC) Ithaca, MI 547,780 12.59 10.87 0.82 4,364 2,217 3.55 62.38 3.07 10.53 2.49 (%) FTE (%) (%) (%) 61 Oconomowoc Bancshares (OCNB) Oconomowoc, WI 1,448,013 12.57 17.01 1.70 22,182 39,632 36.64 62.91 3.71 3.09 0.94 1 Oregon Bancorp (ORBN) Salem, OR 395,889 41.66 60.20 8.57 28,292 89,723 82.42 61.91 3.81 10.01 0.21 62 First IC Corporation (FIEB) Doraville, GA 764,450 12.56 9.06 1.01 7,390 8,925 (3.89) 58.30 3.28 30.91 0.53 2 University Bancorp (UNIB) Ann Arbor, MI 551,451 28.34 65.36 7.88 30,841 126,821 100.34 67.73 2.60 95.55 0.23 63 First Bancshares (FIBH) Bellevue, OH 285,944 12.54 11.98 1.17 3,119 1,864 9.89 61.31 3.86 19.29 1.13 3 MetroCity Bankshares (MCBS0 Doraville, GA 1,897,489 22.73 16.02 2.17 36,394 27,112 (7.57) 43.93 4.18 32.00 0.89 64 Citizens Financial Corp. (CIWV) Elkins, WV 321,925 12.51 14.18 1.41 4,310 3,983 20.94 56.11 4.22 19.48 1.22 4 Thomasville Bancshares (THVB) Thomasville, GA 1,226,592 20.64 19.41 1.75 19,421 15,015 11.78 45.89 3.56 4.35 0.13 65 Village Bank and Trust Financial Corp. (VBFC) Midlothian, VA 706,236 12.49 17.98 1.28 8,554 12,233 29.51 62.76 3.41 37.68 1.20 5 Allied First Bancorp (AFBA) Oswego, IL 146,364 19.93 37.37 4.47 5,762 102,889 63.48 92.00 3.04 36.67 2.20 66 Lyons Bancorp (LYBC) Lyons, NY 1,423,147 12.48 11.06 0.78 10,300 14,376 11.26 65.63 3.37 30.70 0.39 6 CF Bankshares (CFBK) Worthington, OH 1,476,995 19.91 32.04 2.59 29,608 59,993 162.72 46.24 2.54 21.11 0.24 67 CSB Bancorp (CSBB) Millersburg, OH 1,031,632 12.46 11.71 1.13 10,568 6,939 3.77 57.54 3.22 7.82 0.57 7 Bank7 Corp. (BSVN) Oklahoma City, OK 1,016,669 19.75 18.82 2.03 19,266 1,665 12.24 35.61 5.01 27.23 1.43 68 PSB Holdings (PSBQ) Wausau, WI 1,131,955 12.34 10.83 1.01 10,689 10,909 12.01 54.71 3.19 3.38 0.90 8 Plumas Bancorp (PLBC) Reno, NV 1,111,576 19.68 15.54 1.43 14,475 8,245 2.34 50.46 4.02 53.07 0.35 69 Main Street Financial Services Corp. (MSWV) Wheeling, WV 510,636 12.32 9.96 0.88 4,416 444 (3.73) 62.85 3.43 22.26 1.94 9 BNCCORP (BNCC) Bismarck, ND 1,074,131 19.24 37.09 4.21 44,614 84,826 99.05 47.64 3.24 28.05 0.24 70 CW Bancorp (CWBK) Irvine, CA 1,320,462 12.29 13.93 1.06 9,091 7,281 34.25 43.41 3.35 NA NA 10 Mission Bancorp (MSBC) Bakersfield, CA 1,279,888 18.80 16.93 1.45 15,688 6,029 15.62 48.97 3.86 11.64 0.01 71 Blue Ridge Bankshares (BRBS) Luray, VA 1,498,258 12.23 17.69 1.30 17,697 56,613 159.15 64.96 3.48 44.46 0.45 11 First Savings Financial Group (FSFG) Jeffersonville, IN 1,872,911 18.78 28.85 2.58 40,803 160,879 116.49 68.75 3.50 28.10 0.88 72 Pacific Financial Corporation (PFLC) Aberdeen, WA 1,167,293 12.22 10.33 1.07 11,384 20,146 9.35 69.02 3.70 33.40 0.22 12 Communities First Financial Corp. (CFST) Fresno, CA 871,347 18.59 19.29 1.60 11,512 7,074 31.96 44.93 3.92 25.04 0.24 73 United Bancshares (UBOH) Columbus Grove, OH 978,532 12.21 13.53 1.42 13,755 26,711 42.41 61.36 3.77 5.91 0.25 13 FFD Financial Corporation (FFDF) Dover, OH 552,155 17.33 19.28 1.68 8,500 3,843 18.44 46.46 3.47 23.42 0.26 74 Sturgis Bancorp (STBI) Sturgis, MI 643,606 12.18 13.53 0.99 6,006 9,173 27.31 62.80 3.22 27.67 0.98 14 United Bancorporation of Alabama (UBAB) Atmore, AL 993,907 17.21 13.36 1.44 12,169 8,332 3.83 71.43 3.53 56.20 0.44 75 Oxford Bank Corporation (OXBC) Oxford, MI 698,124 12.17 13.83 1.03 7,001 2,810 7.55 57.25 3.28 24.13 1.15 15 Greene County Bancorp MHC (GCBC) Catskill, NY 1,864,929 16.25 15.38 1.18 19,821 8,540 13.62 49.04 3.10 2.36 0.22 76 Huron Valley Bancorp (HVLM) Milford, MI 192,276 12.13 9.25 0.88 1,593 543 1.07 63.43 3.60 41.53 0.00 16 Morris State Bancshares (MBLU) Dublin, GA 1,249,416 16.16 14.56 1.57 17,408 4,160 23.98 52.94 4.53 5.28 1.01 77 Woodlands Financial Services Co. (WDFN) Williamsport, PA 502,463 11.98 10.07 1.02 4,764 4,219 0.75 67.89 3.30 5.15 0.99 17 SouthPoint Bancshares (SOUB) Birmingham, AL 566,518 15.96 17.86 1.48 7,389 15,170 61.53 64.53 3.82 4.39 0.19 78 Northeast Indiana Bancorp (NIDB) Huntington, IN 391,277 11.97 12.72 1.44 5,600 4,644 13.73 53.64 3.41 15.64 1.38 18 Cornerstone Bancorp (CNBP) Palatine, IL 891,183 15.81 19.60 1.10 8,374 10,222 42.16 65.92 3.55 38.47 0.56 79 F&M Bancorp (FMOO) Miamisburg, OH 227,010 11.91 12.44 1.32 2,713 857 14.86 57.84 4.17 35.94 1.19 19 Truxton Corporation (TRUX) Nashville, TN 741,618 15.79 16.06 1.74 11,149 12,199 13.05 52.24 3.00 0.12 0.28 80 Mountain Pacific Bancorp (MBCP) Everett, WA 511,643 11.91 10.88 0.96 4,437 3,263 15.73 58.91 3.38 24.43 3.14 20 Unity Bancorp (UNTY) Clinton, NJ 1,958,914 15.72 14.20 1.35 23,644 12,853 17.12 50.79 3.85 29.51 0.63 81 Embassy Bancorp (EMYB) Bethlehem, PA 1,442,030 11.90 12.07 0.98 12,810 2,317 12.76 54.58 3.03 23.09 0.20 21 FS Bancorp (FXLG) Lagrange, IN 993,506 15.64 16.19 1.59 14,314 5,972 7.15 53.52 3.62 9.62 0.14 82 Heartland BancCorp (HLAN) Whitehall, OH 1,547,747 11.82 11.13 1.05 14,768 13,832 24.82 57.45 3.63 32.06 0.23 22 Minster Financial (MTFC) Minster, OH 6 37,67 7 15.61 15.52 1.30 7,545 6,042 13.36 56.36 3.06 31.89 0.09 83 First Citrus Bancorporation (FCIT) Tampa, FL 528,745 11.82 12.34 0.97 4,901 2,362 18.04 62.60 3.42 38.26 0.43 23 CNB Community Bancorp (CNBB) Hillsdale, MI 937,900 15.31 14.90 1.15 10,104 11,059 (10.69) 61.74 3.87 48.99 0.51 84 Cashmere Valley Bank (CSHX) Cashmere, WA 1,994,288 11.82 11.57 1.42 25,521 18,496 6.09 53.18 2.82 4.79 0.98 24 Capital Bancorp (CBNK) Rockville, MD 1,876,593 15.20 18.00 1.56 25,823 61,041 57.72 68.00 5.14 40.87 0.68 85 Oak Valley Bancorp (OVLY) Oakdale, CA 1,511,478 11.81 11.39 1.01 13,687 4,815 8.57 59.80 3.59 66.38 0.00 25 KS Bancorp (KSBI) Smithfield, NC 485,828 15.10 14.79 0.96 4,371 2,944 16.42 66.46 3.47 29.06 0.63 86 Cortland Bancorp (CLDB) Cortland, OH 821,305 11.79 10.68 1.07 8,263 7,360 5.29 62.52 3.33 28.35 0.93 26 Cornerstone Community Bancorp (CRSB) Red Bluff, CA 497,361 14.96 16.74 1.11 4,626 1,148 23.05 47.76 3.45 43.14 0.00 87 FNB Bancorp (FBIP) Newtown, PA 1,148,783 11.78 9.57 0.92 9,745 6,488 (6.11) 62.93 2.52 14.45 0.28 27 Union Bankshares (UNB) Morrisville, VT 1,093,554 14.77 16.87 1.33 12,805 15,752 16.73 62.64 3.54 24.33 0.44 88 Katahdin Bankshares Corporation (KTHN) Patten, ME 937,007 11.78 13.32 1.02 9,519 5,702 10.00 67.25 3.45 18.95 0.51 28 Summit Bank Group (SBKO) Eugene, OR 761,136 14.64 14.43 1.16 7,933 1,709 17.7 1 52.04 4.26 NA 0.26 89 Centric Financial Corporation (CFCX) Harrisburg, PA 1,118,012 11.68 11.13 0.94 9,057 3,393 15.49 61.43 3.65 4.35 0.98

3-Year Net Demand NPAs/ 3-Year Net Demand NPAs/ Total Net Total Nonint Revenue Efficiency Total Net Total Nonint Revenue Efficiency Avg. ROAE ROAA Interest Deposits/ Total Avg. ROAE ROAA Interest Deposits/ Total Rank Institution/Ticker Location Assets Income Income Growth Ratio Rank Institution/Ticker Location Assets Income Income Growth Ratio ROAE (%) (%) Margin Total Dep. Assets ROAE (%) (%) Margin Total Dep. Assets ($000) ($000) ($000) (%) FTE (%) ($000) ($000) ($000) (%) FTE (%) (%) FTE (%) (%) (%) (%) FTE (%) (%) (%)

90 FNCB Bancorp (FNCB) Dunmore, PA 1,465,679 11.64 10.66 1.13 15,347 6,551 9.98 60.07 3.35 27.51 0.99 151 Norwood Financial Corp. (NWFL) Honesdale, PA 1,851,864 10.53 9.06 0.97 15,080 7,709 28.93 54.55 3.55 23.46 0.24 91 Baker Boyer Bancorp (BBBK) Walla Walla, WA 725,108 11.62 8.85 0.80 5,298 12,553 (3.69) 81.18 3.28 23.69 0.29 152 CBC Holding Company (CBHC) Fitzgerald, GA 198,172 10.50 8.57 1.06 1,872 1,245 0.77 59.01 3.88 21.19 0.82 92 Esquire Financial Holdings (ESQ) Jericho, NY 936,714 11.59 10.69 1.45 12,618 14,647 13.42 55.04 4.47 44.29 0.25 153 Surrey Bancorp (SRYB) Mount Airy, NC 431,064 10.50 9.32 1.18 4,578 2,915 (2.45) 58.55 3.49 36.17 0.22 93 Malaga Financial Corporation (MLGF) Palos Verdes Estates, CA 1,312,294 11.58 12.16 1.43 18,335 785 13.21 31.99 3.01 18.93 0.00 154 Avidbank Holdings (AVBH) San Jose, CA 1,430,626 10.48 7.76 0.72 9,627 2,631 0.30 69.71 3.46 1.25 0.25 94 Northern California National Bank (NCNB) Chico, CA 309,969 11.55 11.53 1.06 3,231 561 7.26 50.52 2.84 24.36 0.68 155 Virginia National Bankshares Corp. (VABK) Charlottesville, VA 848,410 10.47 10.01 1.00 7,978 5,822 9.80 58.73 3.17 7.84 0.15 95 CMUV Bancorp (CMUV) El Centro, CA 259,646 11.55 13.90 1.42 3,387 260 11.20 51.79 4.53 34.68 0.45 156 Commencement Bancorp (CBWA) Tacoma, WA 527,952 10.46 8.11 0.83 4,032 1,234 7.17 62.32 3.31 NA 0.50 96 Fidelity Federal Bancorp (FDLB) Evansville, IN 1,402,300 11.53 15.29 1.76 19,966 30,089 24.11 58.61 2.29 6.64 0.91 157 Oak Ridge Financial Services (BKOR) Oak Ridge, NC 540,630 10.46 7.76 0.62 3,259 3,162 7.55 67.34 3.50 20.23 1.13 97 U & I Financial Corp. (UNIF) Lynnwood, WA 403,898 11.47 11.42 1.69 6,213 4,502 18.53 52.22 4.22 23.67 0.19 158 Shore Bancshares (SHBI) Easton, MD 1,933,315 10.42 7.95 0.92 15,730 10,749 5.39 59.56 3.27 55.63 0.64 98 Summit State Bank (SSBI) Santa Rosa, CA 865,854 11.44 14.68 1.33 10,518 3,574 31.95 52.23 3.91 6.49 0.28 159 Eastern Michigan Financial Corp. (EFIN) Croswell, MI 467,965 10.41 10.82 1.03 4,418 2,851 7.4 9 61.82 2.86 5.99 0.13 99 Killbuck Bancshares (KLIB) Killbuck, OH 685,912 11.42 9.34 0.99 6,049 2,920 (8.67) 64.12 2.97 42.24 0.08 160 First United Corporation (FUNC) Oakland, MD 1,734,030 10.36 11.24 0.89 14,257 18,577 8.13 63.74 3.34 13.55 0.94 100 Logansport Financial Corp. (LOGN) Logansport, IN 220,365 11.39 14.87 1.80 3,915 2,291 32.53 59.09 3.68 17.45 0.65 161 Blackhawk Bancorp (BHWB) Beloit, WI 1,141,599 10.34 10.35 1.02 10,847 19,112 19.87 62.70 3.78 27.23 0.79 101 Coastal Financial Corporation (CCB) Everett, WA 1,766,122 11.38 11.44 0.98 15,146 8,182 30.88 58.14 3.83 46.70 0.04 162 Penns Woods Bancorp (PWOD) Williamsport, PA 1,834,643 10.31 9.67 0.86 15,224 10,549 (2.92) 65.56 2.93 NA 0.90 102 Consumers Bancorp (CBKM) Minerva, OH 754,060 11.38 11.81 1.06 7,4 92 4,251 35.00 61.51 3.82 6.03 0.30 163 NorthWest Indiana Bancorp (NWIN) Munster, IN 1,497,525 10.31 11.51 1.16 16,604 15,722 16.40 64.69 3.47 3.58 1.12 103 River Valley Community Bancorp (RVCB) Yuba City, CA 496,487 11.37 9.70 0.84 4,129 796 15.45 56.71 3.05 44.92 0.10 164 First Home Bancorp (FHBI) Saint Petersburg, FL 1,544,691 10.31 22.65 1.06 12,703 97,695 85.72 75.08 2.88 19.63 0.17 104 FFW Corporation (FFWC) Wabash, IN 467,714 11.36 12.42 1.34 6,030 5,862 21.01 62.99 3.45 20.15 1.06 165 Harleysville Financial Corporation (HARL) Harleysville, PA 873,410 10.30 9.39 0.88 7,307 2,656 (4.44) 58.88 2.80 3.55 0.85 105 United Security Bancshares (UBFO) Fresno, CA 1,092,654 11.36 7.55 0.86 8,961 4,790 (14.34) 57.96 3.39 7.54 1.56 166 Marquette National Corporation (MNAT) Chicago, IL 1,921,322 10.29 13.68 1.32 23,778 19,392 8.49 80.64 3.15 1.23 1.36 106 Chino Commercial Bancorp (CCBC) Chino, CA 314,840 11.36 10.69 0.92 2,625 1,655 9.62 59.74 3.81 16.32 0.43 167 QNB Corp. (QNBC) Quakertown, PA 1,440,229 10.27 9.76 0.90 12,083 7,040 5.23 64.37 2.92 16.66 0.98 107 OP Bancorp (OPBK) Los Angeles, CA 1,366,826 11.35 9.35 1.03 13,127 10,558 2.67 57.12 3.72 46.63 0.07 168 Community Bankers Trust Corporation (EXSB) Richmond, VA 1,644,809 10.27 9.58 0.99 15,548 5,664 3.67 58.57 3.52 38.56 0.82 108 Kish Bancorp (KISB) Belleville, PA 1,106,609 11.33 12.18 0.79 8,039 9,509 13.54 72.99 3.21 15.82 0.21 169 Quaint Oak Bancorp (QNTO) Southampton, PA 484,075 10.26 12.06 0.83 3,245 6,852 27.58 68.03 2.93 14.59 0.13 109 S.B.C.P. Bancorp (SBBI) Cross Plains, WI 1,613,193 11.30 9.71 1.07 15,614 19,239 34.19 59.50 3.60 42.86 0.43 170 Tri City Bankshares Corporation (TRCY) Oak Creek, WI 1,797,841 10.26 7.7 7 0.87 14,216 17,937 0.46 73.65 3.22 4.47 0.86 110 Victory Bancorp (VTYB) Limerick, PA 429,425 11.28 11.03 0.61 2,275 580 12.79 67.00 3.48 32.31 0.04 171 Dimeco (DIMC) Honesdale, PA 882,804 10.24 9.74 1.08 8,856 5,660 9.41 60.71 3.82 8.02 2.60 111 GrandSouth Bancorporation (GRRB) Greenville, SC 1,089,779 11.25 10.64 0.88 8,645 2,160 6.13 68.40 4.42 25.34 0.34 172 Colony Bankcorp (CBAN) Fitzgerald, GA 1,763,974 10.21 8.56 0.70 11,815 22,292 25.55 71.72 3.50 3.79 1.24 112 Century Financial Corporation (CYFL) Coldwater, MI 400,619 11.24 11.89 1.37 5,149 6,220 4.64 59.97 3.34 5.26 0.53 173 Bank of Botetourt (BORT) Buchanan, VA 596,595 10.18 8.86 0.83 4,631 4,070 6.31 63.32 3.29 12.29 0.71 113 People's Bank of Commerce (PBCO) Medford, OR 523,331 11.22 12.66 1.32 6,131 10,322 25.72 63.00 3.86 8.20 0.20 174 Touchmark Bancshares (TMAK) Alpharetta, GA 427,428 10.18 9.37 1.07 4,781 3,369 8.85 49.71 2.71 9.45 0.66 114 Southeastern Banking Corporation (SEBC) Darien, GA 542,981 11.19 9.10 1.16 5,712 3,504 1.98 59.80 3.77 26.62 0.42 175 ENB Financial Corp (ENBP) Ephrata, PA 1,462,313 10.14 10.12 0.96 12,299 14,627 11.49 68.23 3.24 12.68 0.39 115 Mifflinburg Bancorp (MIFF) Mifflinburg, PA 510,746 11.15 11.20 1.11 5,384 2,353 7.66 57.43 3.21 6.61 0.94 176 Southern Michigan Bancorp (SOMC) Coldwater, MI 997,574 10.12 8.43 0.82 7,386 8,378 5.08 67.41 3.22 5.45 0.49 116 Town and Country Financial Corp. (TWCF) Springfield, IL 898,670 11.14 10.04 0.81 7,067 16,561 17.69 66.77 3.34 14.20 0.38 177 Solera National Bancorp (SLRK) Lakewood, CO 436,043 10.12 13.54 1.60 5,934 954 45.63 40.71 3.74 61.62 0.22 117 Chesapeake Financial Shares (CPKF) Kilmarnock, VA 1,204,733 11.14 10.27 1.06 11,749 18,403 7.6 5 71.89 3.80 8.66 0.99 178 Security Bancorp (SCYT) McMinnville, TN 260,821 10.10 9.01 0.94 2,300 2,014 (0.50) 65.25 3.12 43.02 0.11 118 Kentucky Bancshares (KTYB) Paris, KY 1,239,505 11.14 9.54 0.97 11,697 15,630 3.37 71.78 3.29 23.75 0.49 179 GNB Financial Services (GNBF) Gratz, PA 430,480 10.10 11.58 1.05 4,203 1,729 3.21 60.13 3.04 52.27 0.14 119 Susquehanna Community Financial (SQCF) West Milton, PA 501,740 11.11 10.32 1.16 5,340 3,843 14.02 66.50 3.23 5.01 0.09 180 Pontiac Bancorp (PONT) Pontiac, IL 626,580 10.07 10.98 1.39 8,280 6,446 15.30 49.21 3.57 21.52 1.03 120 York Traditions Bank (YRKB) York, PA 640,562 11.08 13.53 1.39 8,368 14,561 47.42 56.99 3.48 18.08 0.65 181 1st Constitution Bancorp (FCCY) Cranbury, NJ 1,806,909 10.06 10.20 1.05 18,086 14,467 31.14 56.10 3.71 7.40 1.23 121 CNB Corporation (CNBW) Conway, SC 1,497,575 11.05 10.50 1.02 14,066 8,409 (0.90) 59.08 2.76 11.60 0.20 182 SVB&T Corporation (SVBT) French Lick, IN 496,118 10.05 10.04 1.00 4,841 7,7 93 27.93 64.85 3.65 4.75 1.21 122 Pioneer Bankcorp (PBKC) Clewiston, FL 498,991 11.05 11.21 0.96 4,495 3,011 16.15 63.18 3.81 39.22 1.00 183 JD BANCSHARES INC. (JDVB) Jennings, LA 1,287,760 10.05 7.69 0.70 7,204 9,761 (1.86) 76.42 3.81 6.34 1.25 123 FCN Banc Corp. (FBVI) Brookville, IN 683,214 11.04 10.23 1.14 6,958 6,003 27.33 63.68 2.93 22.82 0.33 184 Middlebury National Corporation (MDVT) Middlebury, VT 486,304 10.04 10.03 0.92 4,003 4,286 8.43 71.39 3.13 4.05 0.12 124 United Bancorp (UBCP) Martins Ferry, OH 693,402 11.03 11.45 1.13 7,953 4,322 9.75 62.26 3.76 21.05 0.20 185 NMB Financial Corporation (NMBF) Fort Lee, NJ 457,416 9.99 7.62 0.72 3,122 4,062 6.81 58.75 3.21 24.07 0.66 125 Community Bancorp of Santa Maria (CYSM) Santa Maria, CA 338,796 11.03 8.18 0.72 2,209 864 4.77 70.75 4.01 44.99 0.49 186 John Marshall Bancorp (JMSB) Reston, VA 1,885,496 9.96 10.49 1.06 18,526 1,613 17.02 49.89 3.32 12.10 0.03 126 Ledyard Financial Group (LFGP) Hanover, NH 680,912 11.02 11.03 1.11 6,729 13,614 5.46 71.82 2.90 18.56 0.30 187 Community West Bancshares (CWBC) Goleta, CA 975,435 9.96 9.70 0.85 8,245 3,912 6.68 67.96 3.89 23.74 0.76 127 Fidelity D & D Bancorp (FDBC) Dunmore, PA 1,699,510 10.97 9.06 0.87 13,035 14,553 40.21 58.70 3.30 6.64 0.39 188 Eagle Bancorp Montana (EBMT) Helena, MT 1,257,634 9.95 15.02 1.74 21,206 48,343 46.25 65.19 3.92 5.76 0.64 128 Horizon Bancorp (HRRB) Lake Havasu City, AZ 475,720 10.92 12.05 0.88 3,770 4,030 11.05 70.94 3.86 33.32 0.83 189 United National Bank (UNBK) Cairo, GA 247,006 9.91 9.81 1.42 3,244 922 (1.55) 53.94 4.41 14.47 2.42 129 Muncy Bank Financial (MYBF) Muncy, PA 531,574 10.91 11.11 1.13 5,748 3,033 9.91 64.60 3.65 4.26 0.81 190 Premier Financial Bancorp (PFBI) Huntington, WV 1,945,822 9.90 8.82 1.20 22,438 8,444 (0.15) 54.80 3.89 29.85 1.16 130 Pinnacle Bank (PBNK) Gilroy, CA 617,747 10.89 7.11 0.71 3,942 3,727 4.82 67.46 3.84 47.34 0.01 191 Farmers Bankshares (FBVA) Windsor, VA 551,918 9.90 9.40 1.14 5,872 8,984 5.25 71.30 3.11 9.71 0.27 131 Ballston Spa Bancorp (BSPA) Ballston Spa, NY 691,264 10.86 9.21 0.78 4,982 4,401 12.55 71.15 3.36 12.81 0.29 192 Pinnacle Bancshares (PCLB) Jasper, AL 276,129 9.90 10.05 1.19 3,181 1,775 3.40 62.82 3.76 31.15 0.09 132 Tri-County Financial Group, (TYFG) Mendota, IL 1,331,271 10.78 16.44 1.70 21,239 37,215 47.32 55.26 3.39 38.10 0.72 193 PSB Holding Corporation (PSBP) Preston, MD 549,353 9.88 10.32 0.94 4,772 3,260 13.20 66.44 3.50 38.05 0.54 133 Eagle Financial Services (EFSI) Berryville, VA 1,130,152 10.77 11.03 1.10 11,172 7,887 12.02 67.58 3.74 11.27 0.70 194 Fauquier Bankshares (FBSS) Warrenton, VA 867,173 9.88 8.36 0.74 5,877 5,651 2.87 70.46 3.46 7.42 1.26 134 First Northern Community Bancorp (FNRN) Dixon, CA 1,655,376 10.76 8.41 0.79 12,161 7,513 1.55 64.63 3.20 8.83 1.05 195 CNB Bank Shares (CNBN) Carlinville, IL 1,493,620 9.88 10.11 1.01 14,511 12,942 8.65 60.08 3.43 20.30 1.61 135 First Capital (FCAP) Corydon, IN 1,017,551 10.75 9.65 1.12 10,144 8,579 (1.27) 61.41 3.39 8.09 0.31 196 Bancorp. of Southern Indiana (BCSO) Seymour, IN 706,613 9.85 11.17 1.06 6,955 11,896 17.73 67.44 3.07 20.09 1.08 136 BankFirst Capital Corporation (BFCC) Columbus, MS 1,729,355 10.75 10.34 0.89 13,482 19,400 26.82 69.98 3.41 6.35 0.83 197 Sound Financial Bancorp (SFBC) Seattle, WA 861,402 9.82 10.97 1.10 8,937 7,445 12.72 64.83 3.51 35.99 0.70 137 PCB Bancorp (PCB) Los Angeles, CA 1,922,853 10.74 7.08 0.84 16,175 11,731 (2.74) 53.52 3.53 33.89 0.27 198 1st Summit Bancorp of Johnstown (FSMK) Johnstown, PA 1,257,438 9.82 7.55 0.75 8,822 5,140 (0.34) 66.94 2.57 4.29 0.13 138 Riverview Bancorp (RVSB) Vancouver, WA 1,436,184 10.72 6.61 0.74 9,952 11,146 (4.68) 63.10 3.60 7.28 0.29 199 Bank of Commerce Holdings (BOCH) Sacramento, CA 1,763,954 9.81 8.27 0.86 14,164 3,725 2.97 55.95 3.60 8.94 0.63 139 First Farmers and Merchants Corp. (FFMH) Columbia, TN 1,802,145 10.71 9.18 0.89 14,210 13,256 1.80 69.67 2.93 26.57 0.08 200 Oregon Pacific Bancorp (ORPB) Florence, OR 537,141 9.81 11.08 0.90 4,353 5,146 25.45 65.57 4.00 48.25 0.71 140 Century Next Financial Corporation (CTUY) Ruston, LA 515,070 10.70 9.89 1.03 5,214 4,167 4.92 67.42 4.29 9.46 0.88 Median: All Institutions1 640,562 9.22 8.60 0.88 4,982 4,219 9.52 65.99 3.39 21.69 0.52 141 Somerset Trust Holding Company (SOME) Somerset, PA 1,610,627 10.68 9.27 0.76 11,563 18,023 14.77 75.85 3.83 5.43 0.95 Median: Top 200 Institutions2 866,514 11.39 11.23 1.07 8,680 6,467 12.32 61.34 3.49 20.27 0.50 142 Summit Bancshares (SMAL) Oakland, CA 306,669 10.66 7.74 0.93 2,784 727 (1.37) 64.62 4.32 52.67 0.25 Average: All Institutions1 786,082 8.81 8.91 0.92 6,956 8,043 14.33 67.24 3.40 22.84 0.73 143 Washington Business Bank (WBZB) Olympia, WA 108,286 10.63 12.47 1.34 1,352 103 6.79 56.92 3.99 23.62 0.07 Average: Top 200 Institutions2 943,988 12.42 12.83 1.27 10,535 12,354 17.87 60.36 3.54 22.27 0.65 144 Croghan Bancshares (CHBH) Fremont, OH 1,028,452 10.62 10.66 1.42 13,719 8,010 10.83 56.47 3.99 15.45 0.40 145 Bank of San Francisco (BSFO) San Francisco, CA 674,407 10.61 10.81 0.85 4,658 685 25.80 51.36 3.42 43.44 0.33 Source: Capital Performance Group analysis of data from S&P Global Market Intelligence. Ranking is of bank holding companies, banks, and thrifts that had total assets of less than $2 billion as of Dec. 31, 2020, and that are publicly traded or report financials to the SEC. Ranking is based on three-year average ROAE for 2018 to 2020. Additional data shown is for the 12 months ended Dec. 31, 2020. Growth stats compare 2020 to 2019. “One-year gap/assets,” a measure of rate sen- 146 Citizens National Bancshares of Bossier (CNBL) Bossier City, LA 1,226,818 10.59 8.57 0.94 10,814 7,322 3.93 65.91 3.34 0.85 0.82 sitivity, is calculated like so: (rate sensitive assets maturing or repricing within one year) - (rate sensitive liabilities maturing or repricing within one year) / total assets. Financials are sourced from SEC filings. If unavailable, regulatory financials 147 Jefferson Security Bank (JFWV) Shepherdstown, WV 380,710 10.58 9.77 0.83 2,876 1,827 3.82 66.60 3.12 17.99 1.44 were used. Excludes institutions that failed to report GAAP or regulatory data for any year during the ranking period. Excludes institutions with a leverage ratio of less than 5%, a Tier 1 risk-based capital ratio of less than 6%, or a total risk-based capital ratio of less than 10% in any quarter. Excludes industrial banks and institutions that operated as a subchapter S corporation at any time during the ranking period. Also excludes institutions that received a tax benefit of greater than 10% 148 MainStreet Bancshares (MNSB) Fairfax, VA 1,643,165 10.57 10.54 1.05 15,717 7,4 93 20.72 56.67 3.21 30.94 0.08 of net income in 2018, 2019 or 2020. Using the preceding criteria, 48 publicly traded institutions in this size range were excluded. In addition, 27 of the institutions in last year’s ranking are no longer here because they grew their assets over $2 149 Aquesta Financial Holdings (AQFH) Cornelius, NC 680,168 10.56 9.37 0.84 5,263 2,599 15.50 62.24 3.25 33.59 0.90 billion. A total of 511 institutions qualified for the ranking. All data as of March 17. 150 Metro Phoenix Bank (MPHX) Phoenix, AZ 326,012 10.55 14.04 1.65 5,039 1,800 33.31 45.26 4.53 33.66 0.00

32 American Banker May 2021 americanbanker.com May 2021 American Banker 33 The bank killer

PayPal is poised to do what banks have been fearing for decades: become the first integrated tech challenger they can’t clearly beat

By Kevin Wack | May 8 | 20 Min Read

or years, bankers agonized over the day when Big and rewards based on their purchase history, which Tech firms would finallyet s their sights squarely will encourage them to return more frequently; and on financial ervices.s Mainly they worried about eventually, they may treat their PayPal digital wallet like Ffour companies: Amazon, Apple, Facebook and it’s their primary bank account. Google. “Basic financial ervicess are just going to be a part of Meanwhile, a fifth echt powerhouse — somewhat any platform that has hundreds of millions of consumers, smaller but growing fast — was adding products because it’s all tied in to the everyday transactions that traditionally offered by retail banks. This company built a we’re going to see,” PayPal President and CEO Dan huge customer base, but it didn’t position itself as a head- Schulman said in a Feb. 11 presentation. “Our digital wallet on competitor to the nation’s largest banks. Instead, it can bring together previously disparate capabilities that sought to partner with insured depositories. By early this range from payments, to shopping, to financial ervices,s year, it had a bigger market capitalization than all but two and even new forms of digital identification into one super American banks. app.” The company in question, PayPal Holdings, recently San Jose, Calif.-based PayPal is not the only U.S. sketched out strategic plans that summon the industry’s company positioned to pursue this vision. Apple, Google long-held fears about the tech giants. At the firm’s and Walmart could all go down a similar path, which was investor day in February, PayPal executives promised to blazed in China by Alipay and WeChat. build a mobile app that will allow consumers to shop at But among the companies eyeing the massive millions of merchants, while also accomplishing most of American market, PayPal is the first to articulate a what they currently do at banks. Already, the app’s users comprehensive vision of its banking plans. PayPal’s road can transact with debit cards, borrow to make purchases, map — especially when considered in the context of its pay their bills, get paid by their employers, cash checks, recent growth — shows that Big Tech firms are capable of make investments, send money to relatives overseas and disrupting retail banking, even without banking charters. more. Banks are taking notice. In January, JPMorgan PayPal wants to weave consumer financial ervicess Chase Chairman CEO Jamie Dimon declared that banks into an ecosystem that draws strength from its existing “absolutely should be scared shitless” about competition relationships with merchants. Consumers will come to from Big Tech and payments firms. PayPal was one of the PayPal to make purchases, either in physical stores or, firms he cited.

Photo: Getty Images Images Getty Photo: more likely, online; they’ll receive personalized offers Daniela Hawkins, a consultant at Capco, said

that banks tend to move more slowly than their new the rapid growth of e-commerce have helped boost the they need to access their many online accounts. Venmo more frequently. In fact, the only way to apply for competitors from the tech industry, and they have good ubiquity of its digital wallet. Globally, the number of active A diverse array of services — including shopping, the card is by downloading the most recent version of the reason to be wary of PayPal in particular. PayPal accounts grew from 179 million at the end of 2015 payments and banking — gives PayPal access to more app. “I think PayPal is the threat,” she said. “They’re in the to 305 million four years later. customer data that it can use throughout its entire Last year, PayPal launched Pay in 4, its version of catbird’s seat.” Then came the pandemic, which further business. “One feeds into another,” Schulman explained. the buy now/pay later loan that has soared in popularity turbocharged PayPal’s growth. Last year, PayPal added Banking services figure to make PayPal’s platform among online shoppers and is seen by some industry ‘The pandemic has accelerated everything’ 72.7 million net new active accounts — a nearly 25% more engaging for both merchants and consumers. The observers as presenting a competitive challenge to the After PayPal split off from eBay and became an increase in just 12 months. Those numbers include company offers a suite of financial products for small credit card industry. The eight-week, four-payment loans independent company in 2015, it faced a choice about accounts at PayPal-owned brands such as Venmo, which businesses, including loans and a debit card, that make are available at merchants that accept PayPal, allowing how to pursue growth. It could either compete with Visa PayPal acquired in 2013, and online coupon site Honey, it possible for merchants to bypass banks altogether. It customers to finance purchases of up to $600. Borrowers and Mastercard, and by extension the banks that issued which PayPal bought in 2019. also has a growing array of consumer banking products, don’t pay any interest, but those who miss payments may cards in conjunction with the two big payment networks, “The pandemic has accelerated everything,” Jonathan which figure to increase the amount of time that PayPal owe late fees. or it could partner with them. Auerbach, the company’s chief strategy, growth and data users spend on the company’s app, in turn yielding more The buy now/pay later product shows PayPal as a fast PayPal chose the collaborative path, agreeing in officer, said at PayPal’s investor day. revenue for both PayPal and its retail partners. follower that can use its existing scale to quickly become 2016 not to steer shoppers away from paying with cards The tremendous growth in e-commerce last year One of the firm’s newest products is the Venmo a big player in a new category. In the first three months bearing the Visa and Mastercard logos. Those deals, which appears to have boosted the value of PayPal’s consumer credit card, which encourages consumers to interact with after the product’s launch, PayPal reported total volume of included certain economic incentives for PayPal, aligned brand. In 2019, a survey of U.S. consumers found that only the company’s interests more closely with those of large 5% of respondents would trust PayPal most to handle incumbent firms. As digital payments soared in popularity, their finances. Just one year later, 19% of respondents a bigger pie meant a bigger piece for everyone. said the same, according to the survey, which was “It’s pretty clear that the outcome was one that conducted by the nonprofit esearr ch firm AI.B reflected a desire to cooperate rather than fight,” said Over the same one-year period, the percentage of Mark Palmer, an analyst at BTIG. “It was a neat trick.” consumers who said they would trust their primary bank In more recent years, PayPal has extended its the most fell from 83% to 52%. “There was just a mass Celebrating collaborative strategy through partnerships with banks. shift to online transactions,” said Karl Dahlgren, managing “We firmly believe that digitization is a team sport,” Jim director at BAI. “And I think people just started getting Magats, senior vice president for omni payments, said at used to using PayPal.” banking’s the company’s recent investor day. Large credit card issuers — including JPMorgan From installment loans to cryptocurrencies leaders of Chase, Citigroup, Discover Financial Services, Capital One February morning in northern California, One, U.S. Bancorp and American Express — now allow Schulman stood inside a glassy building staged to double their customers to redeem their card rewards by making as a TV studio. Dressed comfortably in jeans and a layer the future. purchases at millions of retailers that accept PayPal. of collarless shirts, Schulman looked the part of a tech Thousands of smaller financial institutions have similar mogul. The 63-year-old Schulman, who came to PayPal arrangements with PayPal through a deal the payments from American Express in 2014, was presenting at the giant struck with the bank tech provider FIS. company’s first-ever virtual investor day. “I wish we could Shaheena Khan New York-based Amex has taken its partnership with all be in person, but obviously that’s not doable,” he began. Regional President | Head, Minnesota & Western Wisconsin PayPal further. In a limited-time offer, users of its Platinum Schulman’s remarks focused on the future of and Centurion cards can get up to $30 in statement credit commerce. He argued that online and in-person shopping each month for eligible purchases made with PayPal. channels are in the midst of converging, amid the rising Congratulations, Shaheena Khan, on being named one of One benefit fo these deals for card-issuing banks is popularity of QR codes and in-store pickup. Retailers American Banker’s Most Powerful Women in Banking: Next. that they incentivize consumers to add a bank-issued are looking for ways to market their wares to shoppers We celebrate the leaders of tomorrow and congratulate all of the 2021 award recipients, credit card as a payment option inside the PayPal digital who are no longer browsing in their physical stores. including our own. Your achievements empower our purpose to boldly grow the good wallet, which has been enjoying strong volume growth. But consumers are buried in promotional emails from BMO Harris Bank N.A. Member FDIC and reflect our commitment to developing innovative talent for the future. PayPal’s collaborative approach combined with merchants and overwhelmed by the number of passwords

CYAN File Name: 11571893_BMOH_American_Banker_Ad_7x5 Safety: N/A PUBLICATIONS 11571893_BMOH_American_Banker_Ad_7x5.indd 1 2021-04-21MAGENTA 5:43 PM 36 American Banker May 2021 americanbanker.com May 2021 American BankerYELLOW 37 Docket #: 11571893 Trim: 7" x 5" BLACK ROUND 1 Client: BMOH Bleed: 7.25" x 5.25" MOD DATE: Apr 21/21 Producer: Samantha Mounphosay VO: N/A START DATE: Apr 21/21 Artist: Michael Pallister THIS IS NOT A COLOUR PROOF D&W | 4 TELLER | 6 REPLAY | 4 MOST POWERFUL WOMEN IN BANKING: NEXT | 10 COMMUNITY BANKS | 30 PAYPAL | 34 FOOD DESERTS | 40 BOOK REVIEW | 47

Warming up to Big Tech Christopher Donat, an analyst at Piper Sandler. in February that having an omnichannel platform where While consumers still trust banks most to handle their financial needs, a 2020 survey found that 19% would One potential flashpoint involves direct access to consumers can pay opens the door to providing products trust PayPal, up from just 5% in 2019. Amazon and Apple also gained ground on banks. the U.S. payment system, which has traditionally been and services that are beneficial to their financialell- w

2019 2020 the exclusive province of banks. Last year, then-acting being. 90% Comptroller of the Currency Brian Brooks floated the “Over time, if Walmart is able to get a critical mass 80% 83% idea of a payments charter that would not require deposit of customers to effectively bank with them,” analysts at 70% insurance, an idea that would appear to be a good fit orf Keefe, Bruyette & Woods wrote in a report earlier this year, 60% PayPal’s business model. “there is potential risk that they are able to roll out a bank- 50% 52% 40% Such access could become even more important as to-bank payment offering that could disrupt debit cards.” 30% discussions about government-issued digital currencies The tech giants are also candidates to build super 20% 19% progress. Fed Chair Jerome Powell indicated in March that apps that include banking services. Google already 10% 7% 7% the U.S. central bank plans to study the potential costs enables users to make payments and find offers from 5% 3% 5% 0% and benefits of a Fed-backed digital currency. retailers through Google Pay. The addition of Google Big Banks PayPal Amazon Apple Schulman also said in February that the company’s Plex accounts — which are expected to launch this year Source: BAI digital wallet could be used to distribute government- in partnership with a slate of banks and credit unions — $750 million in the U.S. and three European countries. Investor Day in February, Schulman reiterated the backed digital currencies. “If you think about how many figures to make the search giant’s payments app more Like its competitors, PayPal says that shoppers company’s commitment to expanding into financial digital wallets we’re going to have over the next two, three, viable as consumers’ primary financial elationship.r spend more money at merchants when they use its services through partnerships. five years,” Schulman said, “we’re a perfect complement These apps will not make banks obsolete. But by installment loan product. But PayPal appears to have a For many financial institutions, PayPal is their to central banks, to governments, to distribute those taking ownership of the customer relationship, they pricing advantage over smaller competitors, bragging largest digital distribution partner, according to PayPal digitized fiat ormsf of currency in a very modern way.” do have the potential to relegate traditional financial that merchants do not pay any more money on Pay in 4 spokeswoman Taylor Watson. “I guess we would More immediately, PayPal could opt to pursue institutions to a secondary role that is less remunerative. purchases beyond what they would normally pay on a fundamentally disagree with the thesis that banks are an industrial bank charter, following the path taken by “It’s up to the incumbent banks to provide a value PayPal transaction. seeing us as a competitive threat,” she said. A tech Square, a competitor in payment processing. “We’re proposition to the customers to make them want to stay,” “There’s no incremental costs,” Chief Financial Officer industry official who spoke on condition of anonymity said watching PayPal very closely,” one banking industry said Sanjay Sakhrani, an analyst at KBW. “Customers have John Rainey said at the company’s investor day. that PayPal consistently seeks not to antagonize banks in source said. “If they were able to get a Fed account, that more choices with modern technology.” In a recent presentation, PayPal suggested that it its lobbying activities. “Don’t rip their face off” is typically would be huge, because then they could disintermediate One challenge that the companies building super wants its digital wallet to become the central touchpoint in the company’s attitude, according to this source. banks from a lot of the payments activity.” apps face is changing entrenched consumer behavior. its customers’ financial lives. The company’s new financial Still, banks have reason to eye PayPal more warily PayPal declined to answer questions about the In China, WeChat adoption closely followed internet products are clearly making that goal more realistic. Half than they did five years ago. company’s thinking regarding its U.S. regulatory status. penetration, so Chinese consumers’ online habits were of all PayPal users who bought and held cryptocurrency In early April, PayPal’s $307 billion market “Our focus is on creating a platform that delivers great not as well established as is now the case in the U.S., are logging in to the PayPal app on a daily basis, according capitalization was about 35% less than JPMorgan Chase’s. user experiences for our consumers and merchants,” the according to the KBW report. to Rainey. “This is precisely the type of engagement But the Silicon Valley company, which operates globally, company said in a written statement. “By partnering with “We think the fundamental question is whether or that we want to see as we add these additional financial reported 377 million active accounts at the end of 2020, financial institutions, we’re able to focus on what we do not it’s too late to change consumer behaviors in the services to our wallet,” he said. compared with 56.3 million digitally active customers at best, while also creating opportunities for the banks we developed markets,” Sakhrani and two other analysts Chase. The stock market already values PayPal at more partner with.” wrote, “given most have already decided how and where ‘There’s going to be tension’ than 45% over Citigroup and Wells Fargo. they will consume their preferred products and services.” Though several fintechs are seeking to become Last fall, when a big bank-owned payments company Race to build a ‘super app’ The KBW analysts argued that Apple and Google are traditional banks in the United States, PayPal seems wrote to the Federal Reserve to complain that tech PayPal is by no means the only big U.S. company well situated to change consumer behavior in wealthy unlikely to follow suit. The company’s lofty valuation is companies were collecting more revenue from debit trying to build a super app that combines shopping, nations, since those tech giants control the operating due in part to its model as a tech company rather than a card swipe fees than large banks were allowed to receive, payments and banking services. Walmart appears to be systems on most mobile phones. But PayPal’s strength in lender. In 2018, PayPal sold a $6.8 billion consumer credit and are doing so by partnering with small banks that making a similar play. The retail giant recently announced payments can also influence consumer behavior. portfolio to Synchrony Financial in an effort to maintain its are exempt from the Fed’s price caps, the PayPal Cash the creation of a fintech startup, filed orf a trademark “This may give a leg up to PayPal in certain ways given asset-light strategy. Mastercard was the first example mentioned. on the name Hazel by Walmart, and hired the head of its leadership position in both customer and merchant PayPal’s collaborative approach has served it well “I think there’s going to be tension there — or there consumer banking at Goldman Sachs to run the unit. adoption, which we believe is head and shoulders above over the last half-decade, and during the company’s could be tension — between banks and PayPal,” said John Furner, Walmart’s U.S. president and CEO, said the next largest digital wallet,” the analysts wrote. AB

A multifaceted, decadelong and public-private effort has directed millions of dollars through tax credits and other incentives to reduce the prevalence of food deserts. But the problems persist.

By Joe Adler | May 8 | 20 Min Read

small Chicago grocery chain rehabilitates a Supplemental Nutritional Access Program benefits by vacant strip mall in an area lacking food stores. 15% for families with children, one of his first actions as In western Massachusetts, a popular food president. Acooperative plans a second location in a rural “They are in this situation through no fault of town to reduce customer travel time. A twice-expanded their own,” Biden said at the signing ceremony. “It’s Houston food bank gives groceries away to needy families unconscionable.” hit hard by this year’s devastating winter storms. But in many communities hard hit by the pandemic, What these stores and pantries have in common is there are innumerable barriers to even accessing the that they give their communities a source of fresh, healthy kind of varied and healthy diet — fruits, vegetables, food. fresh meats and grains — that prevent chronic or acute The other thing they have in common is that they illnesses, such as diabetes, hypertension, stroke, heart exist because of a multipronged, decadelong effort by the disease and even cancer. federal government, community development financial “You can give people resources to buy fruits and institutions, banks and others to expand healthy food vegetables, but if they can’t get to a grocery store, I think access and reduce the footprint of “food deserts” — your impact is going to be greatly diminished,” said Brian areas all over the country where the building blocks of a Lang, director of the Food Trust’s National Campaign for nutritionally adequate diet are not easily accessible. Healthy Food Access, based in Philadelphia. There is evidence that these efforts are making a One of the biggest barriers is the physical proximity durable impact on the dual issues of food insecurity — to a grocery store, and the amount of time and effort defined as inability to afford the food one needs — and required to get to one. the prevalence of food deserts. But the pandemic has laid “Due to socioeconomic issues in certain underserved bare how serious these problems are. markets, people have transportation challenges,” said Feeding America, a national trade group for food Brian Misenheimer, senior vice president of National banks and pantries, estimated that more than 35 million Cooperative Bank, a $3 billion-asset, mission-based Americans experienced food insecurity in 2019 — a 20- lender headquartered in Arlington, Va. “A prime example year low. But in 2020 that number jumped to more than is there’s a community that has a river. The grocery store President Biden visiting the 42 million. is within a mile as the crow flies, but it’s five to seven Houston Food Bank in February. The food bank saw a spike in The problem was urgent enough for President miles away by roadway. The only way to get there if you demand after winter storms left Biden to sign an executive order on Jan. 22 increasing don’t have a car is public transportation, and public millions without power or water.

Health food kick strengthening regional food systems. ‘As the federal New Market Tax Credit-funded projects with a nutritious food financing component have For NMTC projects approved by the CDFI Fund, a large bank is given a tax credit government put grown substantially over the last 10 years for making an initial investment in a store project. That capital typically accompanies their thumb on a direct loan from a smaller bank to help cover additional project costs. the scale ... National Cooperative Bank made a roughly $10 million loan under an NMTC Percentage of NMTC funding for healthy food projects structure to help finance the $25 million purchase and renovation of a vacant the community 25% development 22.1 22 grocery store in Chicago’s South Shore neighborhood. Local Market opened in December 2019. industry generally 20% The city promised another $10 million through its Tax Increment Financing reacted and there 15 program, which allocates property tax increases toward redevelopment. Helping to was more grant 15% 14.5 13 13 12.3 12.3 round out remaining costs was equity from PNC Financial Services Group through funding available 9.8 10 the New Markets Tax Credit program. The tax-credit investment typically funds 20% 10% for these projects.’ to 25% of project costs. 7. 3 5.8 “The New Market Tax Credit program is meant to support and subsidize — Paul Anderson 5% financing apsg such as those in real estate and equipment financing,” said Kevin Vice President 2.2 3.4 Goldsmith, the managing director of community development tax credits for Rapoza Associates 0% JPMorgan Chase. Over the past five years, the bank has invested in over $330 million 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 of NMTC financing ot support food access through projects such as grocery stores and food banks. Source: New Markets Tax Credits Coalition The predominantly Black neighborhood where Local Market is based, next to the University of Chicago and Hyde Park, had been without a full-service grocery transportation closes at 5 p.m. How do you get to the somebody would have picked it up already.’ ” store for nearly seven years, according to Eva Jakubowski, grocery store?” Starting about 15 years ago, states like Pennsylvania an owner of the Chicago-based Shop & Save chain that established healthy food financing initiatives, and then in owns and operates the store. Creating food oases 2010, the Obama administration announced a national “Where we’re located within South Shore, there are In 2006, Mari Gallagher, a Chicago-based researcher Healthy Food Financing Initiative. These programs were still a lot of people who walk to grocery stores or use and consultant, partnered with LaSalle Bank (later designed to use various public-private partnerships to public transportation, which of course makes it that much acquired by Bank of America) to study the public health foster the creation of new access points to healthy food more difficulto t do your everyday grocery shopping,” effects of food deserts in the Windy City. It measured the options in places that don’t have them. Jakubowski said. distance between every city block and both the nearest The efforts include grants and financing through state Projects like the Local Market often involve multiple grocery store and nearest fast-food restaurant, and then and local governments, as well as federal incentives under lenders and sources of capital. That is partly because compared food choices available to health outcomes in the New Markets Tax Credit Program. That program, which grocery stores are a low-margin business. those neighborhoods. began in 2000, awards funds to community development “With financing orf a startup grocery store in these Gallagher said rather than rely on the infrastructure entities to attract bank financing and investment and spur underserved markets, the capital stacks are complex with of a government program, food retailers and banks “could projects in low-income areas. That program was modified many stakeholders,” said Misenheimer. “They’re heavily make their own rules and be more independent.” in 2011 to include areas considered by the Department negotiated between all parties involved. You have to have “Nobody goes where no one is already,” Gallagher of Agriculture to be food deserts as part of its criteria for people who know what they’re doing to come together to said. “But people misunderstand. They think, ‘Well, designating which areas qualify as “highly distressed” and put these deals together. There’s often a lack of tangible groceries would go into a market if there was money therefore prioritized for program assistance. collateral available in the project.” there. If there was no grocery there, there must not be any Under the NMTC framework, small-bank loans And there is evidence that these efforts are making money to make.’ And that’s not always correct. combine with tax credit-based investments from a difference. In 2019, $600 million in funds allocated “It’s like the joke where two economists are walking larger banks to create a capital pool to fund important through the NMTC went to projects with a healthy food down the street and one says to the other, ‘Hey, isn’t that projects that might not otherwise be built in areas in the component, making up 22% of the total funds awarded by a $20 bill we just passed on the sidewalk?’ and they keep greatest need. And that framework has funded projects the tax-credit program. That was up from just 3% in 2008 walking and the other guy says, ‘No, if that was a $20 bill, across the country aimed at expanding food access and and 7% in 2010.

“As the federal government put their thumb on the “There is this process now of creating stronger local bank to highlight its disaster relief efforts. scale and tried to support efforts to expand access to food systems that are decentralized from the larger “They’re doing God’s work,” Biden said, according to press reports. healthy foods, the community development industry national food system,” said Donna Leuchten Nuccio, senior And regulators have found other ways to incentivize banks to finance that generally reacted and there was more grant funding director for healthy food access at the Reinvestment Fund, work. In 2020, the Office of the Comptroller of the Currency published a rule available for these projects,” said Paul Anderson, vice a CDFI based in Philadelphia. “There’s more opportunity revising how the agency enforces the Community Reinvestment Act, a 1977 law president of Rapoza Associates, which helps oversee for food systems investment that we’ll probably see pop that requires banks to make investments in low- and moderate -income areas. research efforts for the New Markets Tax Credit Coalition. up in small-business lending activity at both banks and That new rule included a nonexclusive list of specific activities that can earn a “That really moved the needle in terms of pushing more CDFIs.” bank credit, including investing in an opportunity fund financing a grocery store in organizations to finance grocery stores, food banks and River Valley Co-op works with about 240 local a low-to-moderate-income “opportunity zone.” A bank can also receive credit for other things that expand access to healthy foods.” food vendors. In financing the econds store, the co-op lending to a farm “to construct a building from which to sell produce.” That small But advocates like Lang say that while NMTC-funded collected $5 million in personal loans from about 300 of change can make it clearer to banks that financing these kinds of projects can projects and other initiatives have undoubtedly made its member-owners. benefit their business even if it isn’t routed through the New Market Tax Credit. progress, there is still more work to be done — particularly “It’s food and the vision for an alternative, more “I believe that our new rule is more explicit about these activities being eligible to expand healthy food access in communities of color. locally based food system and more people-based local for CRA even if they didn’t have a New Market Tax Credit attached to them,” said “I don’t think we can quite say that every American economy,” said Prunty. “For some people, the co-op is Barry Wides, the OCC’s deputy comptroller for community affairs. has access to affordable and nutritious food,” Lang said. about access to the kind of healthy food that they need for Bryan Toft, chief revenue officer at the $1.6 billion-asset Sunrise Banks, them and their families at a fair cost. For others it’s about said the St. Paul, Minn., institution, which is also a CDFI, has financed projects in Urban versus rural access the fact that we buy food from their neighbors and we’re food deserts primarily through the NMTC. But there are also other avenues, he Food deserts may be thought of as an urban issue, supporting their families.” said. For example, the bank helped put together a non-NMTC deal to finance the but more rural communities also lack access to healthy construction of a market serving St. Paul’s Hmong community with 250 vendors. food, and the public-private partnership model has been ‘Doing God’s work’ “As the type of bank we are, given our social mission, even without New making progress in those places as well. The Reinvestment Fund in 2010 began researching Markets we put together deals using [Small Business Administration] programs or other nonprofit gap finance lenders,” Toft said. RELATED ONLINE River Valley Co-op is a community-owned nonprofit a way to define and delineate food deserts — or what it STORIES that operates a full-service grocery store in Northampton, terms Limited Supermarket Access, or LSA, areas — the The Food Trust’s founder, Duane Perry, was formerly the head of the Mass., about 100 miles west of Boston. It broke ground USDA has a similar definition that also incorporates merchants’ association at Philadelphia’s Reading Terminal Market. He became Fannie, Freddie double their last year on a new store in adjacent Easthampton, a income levels in its analysis. familiar with shoppers from Black neighborhoods who came to the market funding for affordable former mill town. The Reinvestment Fund found in 2011 that 8% of “because their neighborhoods had no grocery stores,” Lang said. housing projects Co-ops like River Valley view their mission both as Americans — some 24.6 million people — lived in LSA The Food Trust, Reinvestment Fund, then-state Rep. Dwight Evans (now in The mortgage giants were authorized to give just over $1 providing an affordable fresh food option and promoting areas. But in their most recent 2018 analysis, that number Congress) and other stakeholders created the Pennsylvania Fresh Food Financing billion combined to the Nation- the regional food economy by utilizing local food had dropped to 5.6% of the population — or 17.6 million Initiative in 2004. It helped support 88 projects before ending six years later. al Housing Trust Fund and the producers. Americans. That means 7 million people have access to As part of the program, the Reinvestment Fund used a portion of grant money Capital Magnet Fund this year, from the state to reduce credit loss reserves for banks willing to invest in grocery “The co-op is trying to do grocery better. A lot of that healthy food that wasn’t there a decade ago. the highest contribution ever. has natural and organic elements to it,” said Matthew And the NMTC program is not limited to retail grocery projects. Other states created their own food financing initiatives, including California, New Jersey and New York. Sosik, CEO of Hometown Financial Group, which owns stores. Many projects include community centers that JPMorgan, Citi pledge the $1.6 billion-asset Easthampton Savings Bank. He has offer area residents healthy food, and about 20% of all But Lang said several communities are still working out how to bring a grocery trillions toward climate, shopped at the Northampton store. “They’re trying to food-related NMTC projects through 2019 were for food store to an underserved area, and the grocery gap has been magnified yb the sustainability raise the standard. You’re not going to go to River Valley pantries or community food nonprofits. pandemic and the national dialogue on racial equity. JPMorgan Chase set a goal to Co-op and buy processed foods.” Two such projects were related to an expansion of “With the protests over racial injustice over the summer, people started to finance $2.5 trillion in initia- A direct loan from Easthampton Savings Bank, help the Houston Food Bank — the largest food bank in the dig into what issues besides police brutality were impacting quality of life in urban tives that combat climate from a consortium of local community development country, serving 159 million meals over the past year. The areas, people once again came across grocery store access as being one of these change and advance sustainable development over the entities, and an NMTC investment by Capital One financed food bank was put through a critical test in February, quality-of-life issues,” he said. next 10 years, while Citigroup the roughly $20 million project for the Easthampton store, when a brutal winter storm left millions of people without “Everybody needs to eat. Everybody needs a grocery store. Certainly the said it would back $1 trillion of which is slated to open in June. water and power across Texas and left many more families challenges that everybody had getting groceries at the dawn of the pandemic similar efforts by 2030. The effort to expand retail options in food deserts has in need of food. hammered a lot of this home for people — why it was important to have a grocery coincided with a growing push to localize food sources. On a visit to the state, President Biden visited the food store in your community.” AB

Deposits & Withdrawals, Vagner (continued) Deposits & Withdrawals, Martin (continued) Divergence theorem

The Fed has kept interest rates low for years to lower unemployment. But in ‘Engine of millennials are either already parents or are consid- even though the pandemic emergency continues. Inequality,’ Karen Petrou argues the central bank is making a bad situation worse. ering having children, a 44% increase over their LGBTQ+ So we’re left with haves and have-nots. Working people elders. who live in states that guarantee paid leave, or whose em- Simply put, universal paid leave is the best way to ployers provide it, have this basic benefit. The rest of us do By Richard Herring | May 8 | 10 Min Read provide inclusive benefits for every family configuration. not. It allows parents to take leave regardless of their gender, Many banks already offer paid family leave, among them sexual orientation, or how they came to be a parent. It’s Bank of America, Citi, Barclays, M&T Bank and TD Bank. But also good business — businesses that have implement- leaving the question of whether to provide paid family leave Engine of Inequality Powell — have each argued that monetary policy has little ed better paid leave policies have reaped the benefits of to employers leaves millions without this crucial benefit — The Fed and the Future of Wealth in America more than a glancing impact on economic inequality. What stronger employee recruitment, retention and reduced just 20 percent of our country’s private-sector workforce By Karen Petrou is more, they say, the distribution of income and wealth are turnover costs. has paid family leave provided by an employer. questions for Congress, not the Fed. Many companies struggle with retaining women That’s a big problem, not just for working people and ince the financial crisis in 2008, the Federal That deflection is wearing thin, Petrou argues, because specifically, and despite many advances, 43% of women families but for businesses, too. Paid leave helps increase Reserve has embarked on the most accom- the increasing gap between rich and poor has become leave the workforce within one year of having a child, employee engagement and loyalty and reduce turnover, modative monetary policy difficult to ignore and the public increasingly demands that while 74% of them report that they “love their careers.” which leads to significant employer cost savings. Time Sin its history. Between low virtually every economic policy be recon- There are many factors that can contribute to this, but and again, businesses in states with paid leave report that interest rates and quantitative easing — sidered through an inequality lens. we know that in heterosexual couples, the more parental it helps or has no effect on their bottom lines. Businesses known as QE — the Fed has never done The Fed launched its ultra-accommo- leave fathers take, the more likely mothers are to return thrive with paid leave programs in place. so much to encourage investment and dative QE policy in 2008 — an emergency to work full time. Creating equitable family leave policies It’s past to make paid leave available to everyone. The lending for so long. response to help the economy climb out allows parents to share caregiving responsibilities from best way to do that is to create a national family and medical Those policies are designed to lower of the financial crisis. The policy combines the beginning and also sets the stage for a more equita- leave program that covers all workers, addresses the range unemployment and help ordinary Amer- near-zero interest rates with the Fed’s ble division of labor in the future, which will continue to of caregiving needs families face, and is affordable and sus- icans, but in her new book, “Engine of In- active acquisition of assets like agen- pay dividends throughout an employee’s tenure at the tainable for both caregivers and businesses. equality, The Fed and the Future of Wealth cy-backed mortgage-backed securities and company. Such a policy advances families’ economic security, cre- in America,” Federal Financial Analytics other government debt. Some banks and financial institutions are leading ates a more level playing field for large and small businesses, managing partner Karen Petrou argues QE was expected to end by 2013, but the pack. Bank of America, for example, offers 16 weeks and strengthens our economy. It also advances racial equity, the central bank is doing more harm than it has continued through the decade and of paid parental leave and up to an additional 10 weeks of as workers of color are less likely than others to have paid good. expanded aggressively during the COVID unpaid leave, regardless of gender or “primary” or “sec- leave, and universal family leave supports women’s work- Petrou is justly renowned for her pandemic. The Fed’s balance sheet has ondary” caregiver status. Goldman Sachs made head- force success. encyclopedic knowledge of financial reg- grown from about $800 billion before 2008 lines in 2019 when it announced 20 weeks of paid leave to Critically, any federal family leave program must be ulations, having advised a wide range of to $7.7 trillion in March 2021, and infla- all parents, regardless of their gender or parental status. gender-neutral, providing equal paid leave to men and corporate and institutional clients for de- tion-adjusted interest rates have remained More banks should follow suit and evolve their policies to women. About three-quarters of people who take family or cades on the impact of regulations on financial institutions exceptionally low — and often negative — for most of the create a corporate culture where employees — and dads, medical leave each year do so to care for family members and markets. Given that pedigree, one might be surprised decade. in particular — feel empowered to take the leave offered with serious illness or to recover from illness themselves. It’s that the subject of this passionate book is the growing What has this unconventional monetary policy to them. also important because babies and newly-adopted children economic inequality in the United States and what financial accomplished? The Fed’s goal was to increase borrowing As employers, we understandably focus on designing benefit from bonding with dads as well as moms. regulators should do about it. for consumption and investment and boost aggregate benefits for our employees. But when we consider the full Paid leave is a basic support that everyone needs. Work- Her central argument — that the Fed’s accommodative demand, restore sustainable growth and increase inflation family unit, and how what we offer our employee impacts ing people, businesses and our economy will be stronger policies are driving, rather than ameliorating, worsening to the target 2% level. There is some evidence that the first this unit, we will be more successful. AB when it’s provided. AB economic inequality — is one that the Fed has heard before round of QE did boost spending, but the policy as a whole and consistently denied. The last three leaders of the hasn’t had much impact on aggregate demand, sustainable Federal Reserve — Ben Bernanke, Janet Yellen and Jerome growth rate or inflation.

46 American Banker May 2021 americanbanker.com May 2021 American Banker 47 D&W | 4 TELLER | 6 REPLAY | 4 MOST POWERFUL WOMEN IN BANKING: NEXT | 10

Petrou goes a step further, arguing that the Fed’s post-2008 posture is not Further only ineffectual but perverse — inflating asset prices, amplifying financial fragility, Reading increasing inequality and undermining economic growth by keeping inefficient zombie firms alive. Her analysis requires a reconsideration of several assumptions about the distribution of income and wealth in the United States. Many of us believe that the United States offers unparalleled upward mobility. But data indicates that this is less true now than it used to be, and that a low-income family has a better shot at advancing to the middle class in other advanced economies than they do here. We also like to believe that low-wage workers only occupy those jobs temporar- ily, either because they are just starting their careers or perhaps are down on their luck. We celebrate rags-to-riches stories. But the more typical story is rags to more rags and riches to ever-greater wealth. Petrou does not lay the entirety of the United States’ inequality problem at Unbound the Federal Reserve’s feet. She readily admits that a wide range of factors such as by Heather Boushey globalization, the decline in unionization, labor-saving technology, lower education- © 2019 Harvard University Press al achievement and increasing drug addiction are important factors over which the Fed has no control. But neither can those other factors offer a credible explanation for why economic inequality has deteriorated so markedly over the last decade. This motivates her indictment of Fed policy as an engine of inequality, a factor notably absent from the conventional wisdom explaining our worsening inequality. Ultra-accommodative monetary policy has driven up asset prices — values of securities, stocks, homes, almost everything — and that undeniable observation brings with it a corollary observation: Assets are held by the wealthy, and they buy more assets with their growing wealth. Some economists would argue that Petrou overemphasizes the Fed’s ability to set interest rates in an era of secular stagnation when the equilibrium real interest The Price of rate is at or below zero. Even then, it is not obvious that doubling down on QE is the Inequality right policy. It may simply generate an overhang of excessive debt that will lead to by Joseph Stiglitz increasingly overleveraged balance sheets that will inevitably increase our vulnera- © 2012 bility to a crisis and exacerbate deflationary pressures. W.W. Norton & Co. Although Petrou has made an important contribution in describing the Fed’s role in exacerbating economic inequality, to her credit, she details policy reforms that not only curb the Fed’s role in worsening inequality, but also reverse the trend. These proposals range from organizational changes at the Fed to greater emphasis on functional regulation, introduction of a digital dollar and establishment of an Equality Bank charter. The Fed has a role to play, and that role has been insufficiently acknowledged. But a fundamental change will require significant backing from the administration and Congress, and will take many years to bear fruit. The reforms she proposes for the Fed, by contrast, can be accomplished relatively rapidly. Petrou’s analysis is important and her proposals for reforms at the Fed open an important debate on how to foster a more equitable financial ystems that will benefit allAmericans. This debate is long overdue. AB

48 American Banker May 2021 It’s time to hear their voices Access Denied is a revolutionary podcast featuring more than two dozen professionals providing a comprehensive examination of institutional barriers and outright racism across many sectors of ﬁ nancial services.

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