WEDNESDAY OCTOBER 7, 2020 VOL. 185 No. 194 AMERICANBANKER.COM Follow us on Twitter @AmerBanker Square’s Jackie Reses, 5 who led ILC bid and small-biz lending, steps down Parking cash Longtime finance entrepreneur Jackie Reses, who led Square Capital for the last Deposits at commercial banks surged in the spring as spending slowed and five years, is leaving the company at the end recipients of rescue funds socked away their aid, and they've been climbing steadily since of the month. Square has not yet named a See story on page 2 successor. Page 6

Piedmont Bancorp looks $17T 6 to add scale around Atlanta with WestStar purchase The Georgia company will add nearly $16T $200 million in assets as part of the acquisition. Page 6

$15T Wilmington Trust seeks 7 rich clients through hires, acquisitions $14T Wilmington Trust, the wealth management arm of M&T Bank, is extending its hiring spree and considering acquisitions of $13T registered investment advisers. Page 6 Jan Feb Mar Apr May JunJul AugSep* Organizers propose Source: St. Louis Fed (*through Sept. 23) 8 ‘values-based’ bank in Florida Climate First Bank, which would be led by veteran banker Ken LaRoe, would offer loans to help individuals and organizations make Banks are permitted to hold environmentally sound decisions. Page 7 dailybriefing 3 crypto assets. Will they? In July, the OCC issued a letter clarifying JPMorgan sees Deposit glut could dog that federally chartered banks can store 9 frequent-flier points as 1 banks well into next year cryptocurrency assets for their clients. A alternative for investors The flood of liquidity that accompanied the recent global survey finds that many are JPMorgan Chase & Co. wants to help turn pandemic recession isn’t likely to subside wary of the risks. Page 4 airline and hotel loyalty points into an asset anytime soon. Banks will have to employ a akin to stocks or corn futures. Page 7 mix of securities buying, hedging and other Banking panel’s No. 2 balance-sheet-management tricks to prop 4 Republican will not OCC official: We want up margins longer than initially imagined. seek reelection: Report 10 to be diversity role (See chart above.) Page 2 Sen. Pat Toomey, R-Pa., a potential chair of model for banks the Senate Banking Committee in the next Any regulator or bank should build from a Banks urge Fed to Congress, is expected to announce that he is foundation of diversity, dignity and respect, 2 revise liquidity rule not running in 2022. Page 5 says Grovetta Gardineer, the agency’s head after pandemic shock of national bank supervision policy. Page 8 The industry is warning regulators putting the finishing touches on the Net Stable Funding Ratio that the measure could exacerbate volatile market events like the spring selloff of Treasury securities. Page 3 WEDNESDAY OCTOBER 7, 2020 AMERICANBANKER.COM PAGE 2

“We would love to take [the excess cash] of last year, relatively flat to up a little bit LIQUIDITY and make loans,” Turner said. “But there just [compared] to the second quarter,” U.S. aren’t a lot of opportunities to grow right now Bancorp Chief Financial Officer Terry Dolan … and I don’t think we’re going to see a lot told investors during a Barclays conference in Deposit glut of loan growth in a period with this much September. “But we do expect deposit growth uncertainty about the economic recovery to continue through the end of the year, and could dog and the pandemic.” that’s really tied to a lot of the Fed actions that Deposit balances have been skyrocketing are taking place.” for most of the year, rising $1.2 trillion in To manage the extra cash, one bank banks well each of the first two quarters of the year, is charging customers to hold deposits. according to the Federal Deposit Insurance According to a recent Bloomberg article, into next year Corp. The uptick stemmed from a rush of starting next year UBS Group will charge credit-line drawdowns in March and, starting international wealth management clients By Allissa Kline in April, a series of federal stimulus efforts who live abroad and hold deposits in October 05, 2020 including PPP loans to small businesses and Switzerland a fee of $360 a month for holding The flood of deposits that poured into government payments of $1,200 to many 500,000 francs or less. banks during the first half of 2020 was individuals. Analyst Brian Klock of Keefe, Bruyette expected to be temporary. Between Jan. 1 and Sept. 23, the latest date & Woods, who tracks large U.S. regionals, But general unease about an economy for which information is available, deposits at said he hasn’t heard of any of them actively that’s been clobbered by the coronavirus U.S. commercial banks rose 19%, according discouraging deposits. Without knowing pandemic — and fear that there is more pain to the Federal Reserve Bank of St. Louis. As how the economy will shake out and facing to come — continue to drive down consumer of that date, deposits at those banks totaled prolonged low interest rates, banks may be spending and commercial loan demand, $15.7 trillion. feeling “stuck” in terms of what to do with the leaving banks awash in record-level deposits All of that deposit growth is putting cash, Klock said. with few ways to put the cash to work. While pressure on banks’ net interest margins. At But there is a sense that whatever excess interest rates at near zero are making that midyear, the average net interest margin for money banks are holding is ultimately cash relatively cheap, net interest margins the industry declined to 2.81%, the lowest temporary, he said. have narrowed and profitability is a concern. level ever reported in the FDIC’s quarterly “I think what banks are realizing is that Liquidity could stay high if lawmakers banking profile, as asset yields fell at a much if things get worse with the economy, those negotiate a second round of aid for consumers faster rate than funding costs. deposits won’t be around,” Klock said. “And and businesses — perhaps over $1 trillion During industry and investor conferences if things get better, those deposits won’t be on top of the $2.2 trillion already injected last month, executives from banks such as around.” in the spring — and recipients of Paycheck JPMorgan Chase, Wells Fargo, U.S. Bancorp At Comerica in Dallas, average deposits Protection Program loans keep their money and Comerica said deposits continued to be are expected to total $68.6 billion for the third in the bank because of uncertainty about the elevated and could remain so for the rest of quarter, according to a filing. That’s up 23.2% economy or loan forgiveness terms. the year. from the third quarter of 2019 and 6.7% from “I think people are not expecting much Third-quarter deposit numbers “will be the second quarter. in the way of diminished dollars until 2021,” certainly strong relative to the third quarter During an industry conference last week, Randy Rosen, vice president of deposit products at FBX, said of deposit levels. To find near-term relief, some banks Established 1836 One State Street Plaza, 27th floor, New York, NY 10004 are paying near-zero rates on deposits and Phone 212-803-8200 AmericanBanker.com eliminating higher rates for new or preferred customers. Some are using the inflow to buy Editor in Chief Alan Kline 571.403.3846 Copy Editor Neil Cassidy 212.803.8440 mortgage-backed securities or make other Managing Editor Dean Anason 770.621.9935 investments. Other banks are parking cash Reporters/Producers at the Federal Reserve, where it earns at least Executive Editor Bonnie McGeer 212.803.8430 Laura Alix 860.836.5431, Kate Berry 562.434.5432 some interest. Washington Bureau Chief Joe Adler 571.403.3832 Regions Financial in Birmingham, Ala., Executive Editor, Technology Miriam Cross 571.403.3834 is doing all three, plus employing a hedging Penny Crosman 212.803.8673 Jim Dobbs 605.310.7780 strategy put into place about three years ago BankThink Editor Rachel Witkowski 571.403.3857 to protect net interest margin in anticipation John Heltman 571.403.3847, Allissa Kline 716.243.2679 Community Banking Editor Paul Davis 336.852.9496 of a low-interest-rate environment, according Hannah Lang 571.403.3855 to David Turner, chief financial officer of the Contributing Editor Daniel Wolfe 212.803.8397 John Reosti 571.403.3864, Gary Siegel 212.803.1560 $144.1 billion-asset company. At June 30, Digital Managing Editor Regions held $116.8 billion of deposits, its Christopher Wood 212.803.8437 Jackie Stewart 571.403.3852, Kevin Wack 626.486.2341 highest ever, he said.

For up to date and complete coverage go to AmericanBanker.com WEDNESDAY OCTOBER 7, 2020 AMERICANBANKER.COM PAGE 3 retail bank executive Cassandra McKinney much? Between $9 billion and $11 billion, far support the fragile economy while complying said customers of the $84.4 billion-asset bank beyond the normal $2 billion to $3 billion, he with new rules. are being “very cautious” about spending, said. The federal agencies are poised soon especially small businesses that received If the government approves another to finalize the Net Stable Funding Ratio, PPP funds. Without knowing how the PPP stimulus package, that means even more a measure of long-term liquidity strength loan forgiveness process will work or when a liquidity in the system and, at least at Regions, developed after the financial crisis by the COVID-19 vaccine will be ready, it’s hard to the increased likelihood of buying even more international Basel Committee. say when depositors will start spending the mortgage-backed securities. But some in the industry and other money. “We’ll have to invest more of what’s at the analysts say finalizing the rule, not long after “I think what we all know is the coffers are Fed into the securities book,” Turner said. the coronavirus outbreak triggered volatility absolutely full from a deposit perspective and “We’d much rather make loans. Having the in the liquidity markets, is playing with fire. the [loan-to-deposit] values are absolutely economy pick up and having loan production They point to the sudden selloff in Treasury low and that’s not necessarily a winning pick up is what we would like to see, because securities in the spring, which led the Fed combination,” McKinney said. if we take the cash and put it on the loan to buy up Treasuries, saying that the new Deposits at Chemung Canal Trust Co. in book, now we have a different ballgame.” liquidity ratio could make it hard for banks to Elmira, N.Y., are up about $300 million since But bankers might have to keep waiting respond if the market suffered another such the start of the year, mostly on the commercial to see a general increase in loan demand. shock in the future. side, President and CEO Anders Tomson said. The coronavirus, which has killed more than The Bank Policy Institute warned in a Like many of its peers, the $2.1 billion-asset 208,000 in the U.S., remains strong. And the recent blog post that “adopting the NSFR at company found that deposits rolling into the unemployment rate, which has fallen after this time would be both ironic and reckless.” bank haven’t been spent down as expected. skyrocketing in April, was still high at 7.9% at Bill Nelson, the chief economist at the Loan demand excluding PPP loans has the end of September. institute, said in an interview that the NSFR’s been “modest,” so some of the money that the All of which means deposits, at least for the treatment of Treasury securities would bank can’t lend is being shifted into overnight time being, are likely to sit still, FBX’s Rosen have exacterbated the market volatility that deposits and mortgage-backed investment said. necessitated an unprecedented intervention securities, Tomson said. “Until the economy gets back and from the Fed. He noted the events of this past So far, the elevated cash isn’t much of a unemployment improves, which is spring proved that banks could weather the problem because the bank has low funding predicated on getting a vaccine and a return storm without a new liquidity requirement. costs and still makes money, Tomson said. to normalcy, I think there’s going to be a lot “It does make it ironic that they are But if deposits are still high a year from now, of hesitancy for people to start spending adopting this in the wake of events for which the picture will be murkier, he said. money,” he said. it was demonstrably not needed, and it would “I haven’t thought that far forward,” have made it worse,” Nelson said. Tomson said. “I anticipate the country is Banks are already complying with a short- going to rebound. This is a cycle and we need LIQUIDITY REQUIREMENTS term funding measure known as the Liquidity to be patient.” Coverage Ratio, which gauges banks’ ability None of Neil Stanley’s clients are pushing to withstand a sudden market crisis over a depositors away. The former bank CEO Banks urge 30-day period. In contrast, the NSFR assesses who now runs The CorePoint, a consulting a bank’s ability to fund the asset side of its firm that helps banks collect deposits at low Fed to revise balance sheet for one year. prices, said many are taking the long view According to the 2016 proposal by the on building relationships even as they drive Federal Reserve Board, Federal Deposit down the price on deposits to manage the liquidity Insurance Corp. and Office of the Comptroller balance sheet. of the Currency, the rule would apply risk The point is to hang on to customers, he rule after weights to different types of assets and said. liabilities. An institution’s “available stable “What’s happening now is that bankers funding” would have to equal or exceed are legitimately listening and watching and pandemic “required stable funding.” The proposal trying to pick up all the ideas they can of how would generally apply to banks with over to run the bank and help people emotionally shock $250 billion of assets, although less complex and operationally navigate this environment institutions would comply with a modified and keep it all together so they are growing By Hannah Lang version. The NSFR proposal hewed fairly the business,” Stanley said. October 05, 2020 closely to the international standard set by At Regions, corporate deposits — largely, WASHINGTON — For many months, the Basel Committee. non-interest-bearing deposits — have grown regulators have relaxed regulatory standards Despite hope from many big banks that the substantially in the past several months, in order to help banks weather the COVID-19 NSFR was all but dead, Fed Vice Chairman Turner said. So the bank is taking those crisis. But an impending liquidity benchmark for Supervision Randal Quarles said last week deposits and putting them at the Fed. How will test the largest institutions’ ability to that he believed the rule would be finished

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“quite soon.” The Fed is leading the charge the Treasury market instability did indeed emergency loans to small businesses through among the regulators to complete the rule, sap liquidity. But the effects of such volatility various government programs, he said. according to Politico. should be part of a conversation about the “As far as banks not managing their own Quarles, speaking at an event for Harvard post-2008 regulatory regime, he said. liquidity, I’d say we’ve just had the stress test Law School, suggested that regulators will “I don’t think that’s an NSFR-only debate, here to end all stress tests, and the banks finalize the NSFR as well as a separate but it seems like that’s a broader debate about passed it with flying colors,” he said. package of other Basel III requirements. the prudential framework more generally, Marinac agreed that bank liquidity is “The COVID event and the fact that there and what lessons you can draw from the currently robust, but that fact, he argued, are only 24 hours in a day, I think, slowed us market volatility that occurred through makes meeting a new liquidity standard like up a bit in implementing that,” Quarles said. March in particular,” he said. the NSFR a much easier target. “But we’ve picked all of that back up and that But the recent unprecedented rise in “My observation is that liquidity is super will proceed at pace as well. I think those will consumer deposits at banks could also make strong in the industry right now … so I feel be complete over the near to medium term it easier for banks to comply with the NSFR like this shouldn’t be that hard,” he said. “If and that will be all the major elements then while still being able to continue lending, you have a bank that’s struggling on this net that we sought to address will be addressed.” said Marinac. Deposits at banks jumped by funding ratio, that really tells you something, Some analysts say that even though banks’ 13.3% in the first quarter from a year earlier, because I think the bar is lower.” liquidity profiles right now are not overly to $15.8 trillion, the biggest year-over-year risky, the rule is still necessary to ward off increase measured by the FDIC. risky behavior in the future. “I really think that the system is flush with CRYPTOCURRENCIES “As an analyst, I’ve seen this over time deposits, and banks can really kind of make that if you don’t have any guardrails or any hay when the sun shines in terms of getting rules, you will create bad actors,” said Chris core funding, getting some of those ratios Banks are Marinac, director of research at Janney improved or just meeting the standard that Montgomery Scott. “Maybe the acting is not the Fed has,” said Marinac. “As an analyst, I permitted to bad today, but it could be bad tomorrow worry less about it than I would have three because you didn’t have any guardrails.” or four years ago when interest rates were But Nelson suggested that the Fed should higher.” hold crypto weigh the rule against the recent volatility in The Fed has also indicated it is willing to the Treasury market. For example, the final be flexible with liquidity requirements to assets. Will rule could set the stable funding requirement ensure banks are able to continue lending to on Treasury purchases and reverse Treasury households and businesses. repurchases to zero in order to mitigage The NSFR is intended to serve as a they? balance-sheet constraints and prevent complement to the Liquidity Coverage Ratio. another episode of volatility in the future. In May, bank regulators modified the LCR to By Miriam Cross He noted that other international better enable banks to participate in two of October 05, 2020 jurisdictions have instituted such changes, the Fed’s emergency lending facilities. Banks regulated by the Office of the which deviate from the Basel Committee “If the banks really felt threatened, they Comptroller of the Currency were given agreement. “Importantly, this is the way that would constrict lending,” said Marinac. the go-ahead by regulators in July to hold the European Union addressed this problem,” “For the greater industry, I don’t think the customers’ digital assets. But so far, no OCC- he said. Fed wants to be too tough, because then it regulated banks have done so. What’s holding Yet others urged regulators to remain tough basically makes it harder for banks to lend.” them back? and said the rule will have clear benefits. Liquidity rules like the NSFR and the One factor seems to be lack of clarity Bartlett Naylor, a financial policy advocate LCR act as safeguards, and are supposed around exactly what banks are allowed to do at Public Citizen, argued that the Treasury to prevent a repeat of the 2008 financial and the risks therein. market disruptions in the spring that sapped meltdown, Naylor said. The concept of custody isn’t so complicated market liquidity probably require more study “We’re concerned that the [banks] like when it comes to cash held at a bank. to determine the root cause, and it’s unclear to live life on the edge with as little liquidity Account deposits are assets that are owned what effect the NSFR would have had. coverage and as low a Net Stable Funding and controlled by the bank, while items in a “I would say that what happened in the Ratio as they can get away with,” he said. “You safety deposit box more directly belong to the spring deserves a lot of analysis, because it’s make more money with more complicated customer. unclear what problems existed that the Fed investments, and we think that complication “The cash in my bank account isn’t exactly intervened to stop,” he said. “The fact that the poses risks.” my money,” said Bryan Routledge, associate Fed had to do anything I think says that the But Nelson countered that banks should professor of finance in the Tepper School of banking system was not able to carry on by be trusted to self-regulate. Banks have so far Business at Carnegie Mellon University in itself.” fared well since the onset of the coronavirus, Pittsburgh. “It’s a claim against the bank.” David Portilla, a partner at Debevoise & and have played important roles in the path Bills in a safety deposit box would be “your Plimpton and a former Treasury official, said toward economic recovery by facilitating money, but physically stored at the bank,”

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Routledge said. “You get the old-fashioned Several large banks declined to comment track record and know-how of an existing vaults and the big thick doors, but it’s not an or did not respond when asked about their [custodian], they may see that as the right asset of the bank.” plans to hold these assets. way to go to market as opposed to building it The concept gets murkier when Roger Cabrera, a spokesman for Wells all in house,” Ferraro said. extended to banks assuming custody over Fargo, said in a statement: “Wells Fargo Ferraro said the OCC’s letter could signal cryptocurrency. is committed to exploring emerging the intent eventually to launch a central The OCC issued an interpretive letter in technologies, but as with all emerging bank digital currency. China is planning to July confirming that bank custody services technologies, understanding the regulatory launch a digital version of its currency, while could include holding cryptographic keys environment and ensuring customer privacy the European Central Bank will soon start and other crypto-related assets, in response and security are foundational elements of experimenting with a digital version of the to a query from an unnamed bank. this exploration. While we do not accept euro. This clarification applies to federally crypto assets — in deposit, custodial, or other Clarifying that federally regulated banks chartered banks. Currently, companies accounts — we will continue to evaluate can custody crypto assets, Ferraro said, “is that receive Wyoming’s special-purpose the underlying technology for potential the first step in a very long cascade of events depository institution charter and trust transactional, transparency, and settlement that would have to happen for the U.S. to companies in some states can offer digital innovations it may hold.” eventually issue its own currency that is asset custody services. But the interest exists. natively digital.” “The OCC is trying to get in front of cutting- Steve Kurz, head of asset management at edge issues by clarifying that national banks Galaxy Digital, a New York financial services can offer services related to crypto where the and investment management company in the SENATE BANKING states have already provided such clarification digital asset sector, said: “On an international COMMITTEE to state-chartered banks,” said Paul Clark, and domestic basis, we’ve seen senior level partner at Seward & Kissel LLP, which has interest from large custodial, commercial offices in New York and Washington. and investment banks for many years with Banking Customers are likely to be institutional respect to cryptocurrency custody, trading rather than individual investors in and management. The custodial piece is panel’s No. 2 cryptocurrency. Registered investment viewed as the foundation with which other advisers, for example, may prefer holding services can be built or added.” crypto assets with a full-service bank, which The deciding factor for many financial Republican can provide loans and other services, rather institutions will be whether their clients are than with a trust company. demanding the service. Banks would need will not seek Banks might decide to offer crypto custody to invest in technology to hold crypto assets if it helps them keep institutional clients and develop robust anti-money- laundering who are looking for it and they can use it systems that would satisfy the OCC, said reelection: as a marketing tactic to attract new clients. Clark, the Seward & Kissel partner. Collecting fees to store these assets could be “Suffice it to say that it will be limited to Report another incentive. banks that believe there is a sufficiently large There are a number of considerations as market to warrant the investment,” said Clark. By Neil Haggerty to when it makes sense for a bank to exercise “It’s not clear that that market yet exists.” October 05, 2020 this power. Although most banks are mum There is also a learning curve when it comes WASHINGTON — A senior Republican about their intentions, experts agree that to securely offering custody of cryptocurrency on the Senate Banking Committee seen as a they would need sufficient demand from assets, and it’s unlikely a bank that hasn’t potential chairman if the GOP holds onto the customers to justify the time, resources and already dabbled in cryptocurrency custody Senate is expected to announce Monday that technology needed to safely hold these assets. will enter the field in the short term. he will not seek reelection in 2022, according Many are also wary of the risks of “The main import of the letter is it will make to The Philadelphia Inquirer. cryptocurrency in general, according to internal conversations with management and The newspaper reported over the weekend recent research. compliance easier,” said Anthony Tu-Sekine, that Sen. Pat Toomey, R-Pa., will not run in A global survey conducted by the another partner at Seward & Kissel. the next midterm election, raising questions Association of Certified Anti-Money Chris Ferraro, president of Galaxy about the long-term Republican leadership Laundering Specialists and the Royal Digital, said that rather than buy or build of the Banking Committee. Toomey is also United Services Institute found that 35% of infrastructure to hold cryptocurrency expected to announce that he will not run for respondents from financial institutions felt assets, most banks would opt to white label governor of Pennsylvania. that the primary use of cryptocurrency was the service from an existing custodian. For Toomey, currently the panel’s No. 2 for illicit transactions, and 70% worry that instance, Coinbase and Gemini provide Republican, could succeed current Chairman holding cryptocurrency could expose their crypto custody. Mike Crapo, R-Idaho, if the GOP maintains institution to criminal activity such as money “If a bank can put its brand, balance sheet its Senate majority this November. Crapo laundering. and reputation as a wrapper around the may vie to fill an expected opening atop the

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Senate Finance Committee. with Square CEO Jack Dorsey to develop or early 2021. Piedmont did not disclose the Toomey was one of the key senators the company’s small-business lending arm. price it will pay. involved in drafting the Tax Cuts and Jobs Act, Square Capital launched in 2014. “As we have grown organically and which passed in 2017 without any Democrats During the coronavirus crisis, Square through acquisition, our goal has been to supporting the legislation and boosted the Capital pivoted from doling out loans up remain a trusted resource for consumers earnings of U.S. banks. to $100,000 to rapidly providing more than and businesses,” Monty Watson, Piedmont’s Before joining Congress in 1999 as a 80,000 Paycheck Protection Program loans chairman and CEO, said in the release. member of the House, Toomey was a Wall to distressed companies, amounting to $873 “Piedmont and WestSide share a similar Street banker and derivatives trader. million. commitment to serving our customers and From 2005, to 2009, Toomey served as “One of the top takeaways from this crisis is shareholders, with the best bankers in our president of Club for Growth, a conservative also something we’ve known for a long time: respective communities,” Watson added. “We organization and super PAC focused on Small businesses are routinely overlooked believe this is an exceptional opportunity to cutting taxes, free trade and deregulation. and underserved by the traditional finance add the talented WestSide bankers to our system,” Reses told American Banker last team and to enhance our footprint in metro month. “These comparably small loans made Atlanta.” PAYCHECK PROTECTION a massive amount of difference to businesses, “We believe this combination will allow PROGRAM and I’m grateful that I’ve been able to us to serve our existing customers more personally hear the stories of resilience and fully and will open opportunities to reach a perseverance of sellers who were able to much broader part of our community. We Square’s receive PPP through us.” look forward to a bright future together,” Ford Before joining Square, Reses was chief Thigpen, WestSide’s president and CEO, said Jackie Reses, development officer at Yahoo and spent a in the release. decade as a partner at the New York private Piper Sandler and Alston & Bird advised equity fund Apax Partners leading strategic Piedmont. Burke Group and Miller and who led ILC investments. Previously she spent seven Martin advised WestSide. years handling mergers and acquisitions at bid and small- Goldman Sachs. biz lending, WEALTH MANAGEMENT M&A Wilmington steps down Piedmont Trust seeks By Kate Fitzgerald October 05, 2020 Bancorp Longtime finance entrepreneur Jackie rich clients Reses, who led Square Capital for the last five years, is leaving the company at the end looks to add through hires, of the month. Square has not yet named a successor. scale around Reses, honored this year by American acquisitions Banker as one of the Most Powerful Women in Finance, played a key role in Square’s Atlanta with By Bloomberg News successful bid to become an FDIC industrial October 05, 2020 loan company. In an Oct. 2 Twitter post, WestStar Wilmington Trust, the wealth management Reses said she wants to take time off with her arm of M&T Bank, is extending its hiring spree family and ski. She said she has no immediate and considering acquisitions of registered plans to take another job. purchase investment advisers. Square said in a filing with the Securities Wilmington is open to “targeted” and Exchange Commission that Reses’s last By Paul Davis purchases of RIAs in key markets, though it’s day with the company will be Oct. 30. October 05, 2020 not currently in talks with specific firms, said Reses, who has spent 30 years in finance Piedmont Bancorp in Peachtree Corners, Doris Meister, the company’s head of wealth and currently serves on the Economic Ga., has agreed to buy WestSide Bank in management. It also plans to expand services Development Council of the Federal Reserve Hiram, Ga. to rich clients by doubling the number of its Bank of San Francisco, recounted highlights The $1.3 billion-asset Piedmont said in a advisers over the next three to four years, of her tenure as Square in a letter to colleagues press release Monday that it expects to buy focusing on staff who will cater to more she shared on Twitter, including working the $172 million-asset WestSide in late 2020 diverse customers, including women and

For up to date and complete coverage go to AmericanBanker.com WEDNESDAY OCTOBER 7, 2020 AMERICANBANKER.COM PAGE 7 minority business owners. “We’ve laid the foundation — we can CONSUMER BANKING PAYCHECK PROTECTION really grow and scale our business,” Meister, PROGRAM who has been in the wealth industry for more than two decades, said in an interview. Organizers “We needed people who were very client- JPMorgan oriented, can build great teams and know propose how to build a great business.” sees frequent- The company hired a dozen people and promoted employees in the past year as part ‘values- of a push in key markets. Senior executives, flier points as advisers and strategists were added to based’ bank expand services for wealthy clients in Atlanta, alternative for Baltimore, Boston, Los Angeles and New Jersey, it said in a statement Monday. It also in Florida promoted 10 wealth advisers from within. investors The hires include: By Paul Davis • Garrett Alton, wealth market leader for October 05, 2020 By Bloomberg News Atlanta. Alton, who has more than two Ken LaRoe is looking to form another October 01, 2020 decades of experience in the sector, joined bank built around protecting the JPMorgan Chase & Co. wants to help turn from BNY Mellon Wealth Management. environment. airline and hotel loyalty points into an asset • Dave D’Amico, wealth market leader for LaRoe, who sold First Green Bancorp to akin to stocks or corn futures. Boston. He has worked in investment Seacoast Banking Corp. of Florida in 2018, The bank is working with Affinity Capital management for more than three is leading a group that applied with the Exchange to let companies turn rewards decades. Federal Deposit Insurance Corp. on Friday programs into a standardized, exchangeable • Lisa Ligas, director of wealth strategies in to form Climate First Bank in St. Petersburg, currency to be traded by institutional investors Los Angeles. She was formerly a senior Fla. and used as collateral to raise capital, according vice president at Northern Trust. Organizers hope to open the bank next to a statement Thursday. Through the • Merryll McElwain, senior wealth adviser year. Like First Green, the proposed bank partnership, massive loyalty programs can be in Los Angeles. She previously worked at would implement “a values-based business converted into pieces, or “reserve points,” sold BNY Mellon. model,” the group said in a Monday press to investors like hedge funds or banks on the • Tony Rogers, senior wealth adviser in release. ACE marketplace, and later traded on the same New Jersey, and also a BNY Mellon alum. “My experience has shown there is venue. • Aimee Turner, senior family wealth a strong need and significant customer “We’re essentially creating an asset class,” adviser in Philadelphia. She is rejoining demand for an impact-based financial Andreas Pierroutsakos, a managing director at the company after 19 years with institution,” LaRoe said in the release. JPMorgan, said in an interview. Traditionally, Wilmington previously. “The St. Pete community is already moving companies sell points directly to banks. “But • Robert Whelan, senior wealth adviser toward green initiatives, and I want to there are many other investors that want in Boston. He previously oversaw Lido propel that movement with the opening of access,” he said. “This is opening the door for Advisors’ office in the city. Climate First … as a new and conscious way that.” • Scott Wilkins, senior wealth adviser in of banking.” Frequent-flyer programs generate billions Atlanta. Wilkins was formerly managing Climate First would serve retail and in revenue for the largest airlines through partner and owner of Cielo Partners. commercial clients, including an emphasis agreements in which carriers sell their points Wilmington is focused on deepening its on nongovernmental organizations and to banks which award them to credit-card links to large, wealthy families with complex businesses committed to sustainability customers. Pledging miles programsas finances. It’s also boosting offerings for efforts. The bank would offer loans for collateral for debt financings has become a women, whose control of U.S. financial assets solar photovoltaic, energy retrofits and popular way for cash-strapped airlines to raise isforecast to risein the coming decades. To infrastructure to help combat climate funds to get them through the pandemic. Using serve those clients, the company plans to change. the ACE platform, a company could pledge a keep adding to its ranks. “Many people feel they have no choice slice of its loyalty program as collateral instead “A number of professionals in the but to turn to the country’s largest banks of the entire thing. business are really tired of working for huge who do not practice values or impact-based “In an ideal world, reserve points become organizations,” Meister said. “That’s been financing, and I want to change that with the way that people get exposure to loyalty a major selling point for us — we have top Climate First,” LaRoe said. programs and the instrument becomes a talent, we have great people, but we’re also a key part of how issuers of loyalty programs size where you can personally relate to each finance and sell across the capital structure,” other.” said Akrati Johari, co-head of North America

For up to date and complete coverage go to AmericanBanker.com WEDNESDAY OCTOBER 7, 2020 AMERICANBANKER.COM PAGE 8 digital innovation in JPMorgan’s corporate and They also prepared me for the reality that, as woman of color. investment bank. a woman of color, I would encounter bigotry That fact bestows a huge responsibility on me Pierroutsakos likened the project to the and ignorance in the course of my life. Those to represent other women, particularly women leveraged loan-market. Initially, banks were the life lessons proved valuable personally and of color with the dignity to garner the respect we only ones that bought and sold the loans. Now, professionally. deserve. I am proud and humbled to have the the loans are traded among investors. I chose to stay in North Carolina to pursue my opportunity to be an envoy for my gender, race Through the agreement, JPMorgan has dream of becoming a lawyer. I believed that path and nation, demonstrating that there is strength the exclusive right to help companies issue would allow me to address persistent racial and in diversity. instruments backed by reserve points using economic injustices. As the head of bank supervision policy at ACE’s points-exchange platform. The New York- As a student in the early ‘80s at Wake Forest the OCC today, I work with many talented and based bank is also assured the same pricing University, where African Americans were a diverse women and men to ensure that the terms as other investors in the secondary tiny fraction of the population, I was told when federal banking system operates in a safe, sound market. seeking help from an instructor, to ask someone and fair manner. United Airlines Holdings Inc. sold $6.8 billion of “my own kind.” Those words shocked me, but For me, fairness is not a sound bite. It is a rally of bonds and loans backed by its MileagePlus I was undeterred. cry that my heritage obligates me to work toward. program in June, increasing the financing I engaged that moment with dignity — Bank supervision offered me an opportunity to from a planned $5 billion after receiving strong although it was not met with respect. And I fight inequality in a system that is fundamental investor demand. In September, Delta Air Lines realized the truth of another childhood lesson: I to the livelihoods of all Americans — aligning, Inc. borrowed $9 billion against its frequent- would have to work twice as hard to get half as unexpectedly, with my career goal when I went flyer program in the largest airline debt sale on far. into law. Fair access is built into the mission of record. Following Wake, I chose North Carolina the agency I serve by statute. I take this charge to ACE and JPMorgan are looking to take things Central University Law School, a historically heart. Unfairness stings in visceral ways. a step further. Black school and my father’s alma mater. We have a purpose and responsibility to “Think of it as a way to take emergency NCCU had a great pass rate for the bar. More model the kind of people we hope others financing and make it recurring, renewable importantly, the dean, the instructors and become, through our work and behavior. That source of liquidity, not a once-and-done event,” other students looked like me. I was supported, is why I have dedicated my career to breaking said ACE CEO and founder Atanas Christov. challenged and pushed — hard. down the structural barriers that prevent some I carried myself with dignity, and there, it from being afforded dignity and respect that was met with respect. I became part of the moot accompanies full and fair participation in the BANKTHINK court team where we had great success — not financial system. among small schools or just other historically It is why I am proud to associate my parents’ Black colleges and universities but against the name with modernizing the Community OCC official: big-name schools and Ivies. Reinvestment Act of 1977, to promote lending We were coached to argue without notes, a and investment in underserved communities. We want to respected tradition of NCCU law with no safety And also, supporting an OCC venture called net to catch us. Looking back, I recognize this Project Reach to tackle stubborn systemic was preparation for the relevant life lesson — issues that shut people out of a system that has be diversity twice as hard, half as far. bestowed wealth and benefits on others. In my third year during a career fair, I Few might have imagined that a Black role model for discovered the Federal Deposit Insurance Corp. preacher’s daughter from rural 1960s North honors program and became the first African Carolina would someday be responsible for American admitted to the program. I joined the shaping the standards for the largest banks in the banks FDIC after earning my law degree with honors world and community banks across our country. from NCCU in 1987 and began a 33-year (and At such a heady moment in our history, By Grovetta N. Gardineer counting) career regulating banks. I began at when social unrest continues as a consequence October 05, 2020 the FDIC, then at the Office of Thrift Supervision of too many people being excluded from or Carry yourself with dignity so that you may and now at the Office of the Comptroller of the underserved by our financial system, I feel a earn respect. Currency. special obligation to use this extraordinary I learned that lesson growing up in rural During this time, I have seen progress in our opportunity to work toward making things fair North Carolina in the ‘60s and ‘70s from my country, in banking and in federal service. Yet I for all. mother, the principal of my high school, and my still see too few people who look like me in board father, a minister who marched for civil rights rooms, in senior leadership positions among Grovetta N. Gardineer is senior deputy as part of the Southern Christian Leadership federal agencies and among international bank comptroller for bank supervision policy at the Conference. supervision leaders. Office of the Comptroller of the Currency. q They were examples of what African In those settings, just as in the nearly all- American leadership and service meant, and white classrooms of Wake, I am still among the © 2020 Arizent and American Banker. they inspired me to a life of public service. very few women, and almost always the only All rights reserved.

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