BANKER of the YEAR Bruce Van Saun, Citizens Financial Group

December 2019 | americanbanker.com

BANKER OF THE YEAR Bruce Van Saun, Citizens Financial Group

Community Banker of the Year Spence Mullis, Morris Bank

001_ABM_1219 1 11/12/19 11:36 AM 0C2_ABM1219 2 11/11/2019 4:42:15 PM Contents December 2019 | VOL. 129 | NO. 12

BEST IN BANKING 2019

Banker of the Year 12 Citizens Financial Group’s Bruce Van Saun Not that long ago Citizens Financial was struggling to remain relevant. Thanks to Van Saun and his management team — and a well- timed spinoff from Royal Bank of Scotland — the company is on the rise.

12 Community Banker Of the Year

18 Morris Bank’s Spence Mullis Mullis has thrived as a traditional community banker, leading the redevelopment of historic buildings in a small, struggling Georgia town and successfully growing Morris Bank in a 18 24 mostly rural market.

Briefings requirement that lenders start collecting and 10 reporting data on small-business loans seems to Industry gets a cloud of its own 4 have plenty of industry support Bank of America and IBM teamed up to build a Jail time is no bar to employment public cloud specifically for banks JPMorgan Chase is broadening its efforts to 7 hire former prisoners for entry-level jobs and Digital first, but flexible 11 pushing for policy changes to help people with Citigroup’s deposit strategy has brought in A fintech’s college try criminal records re-enter the workforce billions of dollars from credit card customers A new feature Digit is adding to its savings app outside of its footprint, but branch openings are will help users pay down their student loan debt 6 still a possibility faster No credit history, no problem Immigrants typically have a hard time getting credit, but American Express has worked out a BankTechnology BackPorch solution that is the first of its kind 8 24 7 Putting their trust in AI Quotes from Ana Botin, Charlie Scharf, Mark Let there be ‘sunshine’ in small-biz First National Bank of Omaha and TCF National Zuckerberg, and more lending Bank in Detroit are among the traditional lenders For a measure that’s languished in bureaucrat- starting to use artificial intelligence for credit ic limbo for nine years, the Dodd-Frank Act’s decisions Cover art: Tim O’Brien

americanbanker.com December 2019 American Banker 1

001_ABM_1219 1 11/11/19 3:31 PM Volume 129, No. 12 american banker.com Editor’s What’sView going on Executive Editor Bonnie McGeer Art Director Robin Henriquez Contributors Penny Crosman, Alan Kline, Andy Peters, @americanbanker.com Jon Prior, Kevin Wack

Established 1836 One State Street Plaza, 27th floor, New York, NY 10004

Phone 212-803-8200 www.americanbanker.com

Editor in Chief Rob Blackwell 571.403.3834 Managing Editor Dean Anason 770.621.9935 Executive Editor Bonnie McGeer 212.803.8430 Senior Editor Alan Kline 571.403.3846 Editor at Large Penny Crosman 212.803.8673 Washington Bureau Chief Joe Adler 571.403.3832 Technology Editor Suleman Din 212.803.8738 BankThink Editor Rachel Witkowski 571.403.3857 Community Banking Editor Paul Davis 336.852.9496 News Editor Andy Peters 404.500.5770 Contributing Editor Daniel Wolfe 212.803.8397 Digital Managing Editor Christopher Wood 212.803.8437 Copy Editor Neil Cassidy 212.803.8440 Reporters/Producers Laura Alix 860.836.5431 Kate Berry 562.434.5432 Jim Dobbs 605.310.7780 Neil Haggerty 571.403.3837 John Heltman 571.403.3847 Will Hernandez 212.803.8731 Hannah Lang 571.403.3855 Brendan Pedersen 571.403.3878 Jon Prior 214.629.5894 John Reosti 571.403.3864 Gary Siegel 212.803.1560 Jackie Stewart 571.403.3852 Kevin Wack 626.486.2341

Group Editorial Director, Banking/Capital Markets Richard Melville 212.803.8679 Executive Director, Content Operations and Creative Services MOST READ MOST SHARED Michael Chu 212.803.8313 Busy quarter for BB&T, SunTrust Nbkc's deposit relationships ADVERTISING • July 10: Deal approved by N.C. Commissioner of Banks Northeast Joust (gig economy): provides checking account for freelancers Brad Bava 212.803.8829 • July 24: CEOs appeared before key House committee Midwest/Southwest Truebill (bill tracker): provides savings accounts for users Shelly Schmeling 312.932.9392 • July 30: Shareholders approved deal West Tip Yourself (PFM): provides savings accounts for users Sara Culley 831.438.8408 • Sept. 5: Filled 75% of leadership posts Midatlantic/Southeast Digs (mortgage): savings app/account for first-time home buyers David Cleworth 843.640.3713 • September: 100 post-merger processes pass readiness test Senior Marketing Manager Source: The companies Source: nbkc bank Jamie Billington Group Director Custom Marketing Solutions Virginia Wiese 704.987.3224 Customer Service/Subscriptions Big deal’s closing may be delayed The war for online deposits is on [email protected] 212.803.8500 BB&T and SunTrust say they’re working Seemingly everyone — banks of all

Licensing and Reuse of Content: Contact our official hard to complete their merger this sizes, wealth management firms, credit partner, Wright’s Media, for more information about available usages, license and reprint fees, and award seal year — including spending millions on unions and fintechs — is offering artwork at [email protected] or retention payments — but there’s no high-interest, digital-only savings and (877) 652-5295. Please note that Wright’s Media is the only authorized company that we’ve partnered with for guarantee on how soon they will get a checking. Get an overview of what’s SourceMedia materials. decision from regulators. driving the intense competition.

CHIEF EXECUTIVE OFFICER ��Gemma Postlethwaite

CHIEF FINANCIAL OFFICER ��Debra Mason American Banker (ISSN 2162-3198) Vol. 129 No. 12, is published monthly by SourceMedia, One State Street Plaza, 27th Floor New York, CHIEF STRATEGY OFFICER ��Jeff Mancini NY 10004. Subscription price: $149 per year in the U.S.; $229 per year for all other countries. Periodical postage paid at New York, NY and additional U.S. mailing offices. POSTMASTER: send all address changes to American Banker, One State Street Plaza, New York, NY CHIEF REVENUE OFFICER ��Dave Colford 10004. For subscriptions, renewals, address changes and delivery service issues contact our Customer Service department at (212) 803-8500 CHIEF CONTENT OFFICER ��David Evans or email: [email protected]. Send editorial inquires and manuscripts to American Banker, One State Street Plaza, 27th Floor, New York, NY 10004. This publication is designed to provide accurate and authoritative information regarding the subject matter covered. It is VP, PEOPLE & CULTURE ��Lee Gavin sold with the understanding that the publisher is not engaged in rendering financial, legal, accounting, tax or other professional service. American Banker is a registered trademark used herein under license. © 2019 SourceMedia, Incorporated and American Banker. All rights reserved. www.americanbanker.com.

2 American Banker December 2019

002_ABM1219 2 11/7/2019 1:32:35 PM FIFTH THIRD CORPORATE BANK FINANCIAL INSTITUTIONS

WHERE EXPERIENCE AND INNOVATION INTERSECT.

Joshua H. Landau SVP, Corporate Banking Group Head Financial Institutions Group

Josh and the Financial Institutions Group experts at Fifth Third Corporate Bank do more than o er competitive capital solutions. They build personal relationships with clients and provide meaningful guidance through all economic cycles— resulting in a partnership that’s truly strategic, ﬂ exible and e cient.

This is banking a Fifth Third better.®

53.com/CorporateBank

Member FDIC

003_ABM1219 3 11/11/2019 4:42:18 PM Briefings RECRUITING | FINANCIAL INCLUSION | SMALL BUSINESS | CONSUMER BANKING

A second chance at JPMorgan Chase

How the nation’s largest bank by assets plans to help people with criminal histories reenter the workforce

By Jon Prior

JPMorgan Chase is broadening its workers and making the economy released,” Dimon said in his 2018 letter. effort to help former prisoners. stronger. “Reducing recidivism is not only It is piloting a program in Chicago in About 10% of the employees important to returning citizens and their which it is teaming up with area JPMorgan hired last year had histories families — it can also have profound nonprofits to help train those with of minor crimes, including disorderly implications for public safety.” criminal backgrounds for entry-level conduct, drug possession and driving JPMorgan had previously removed jobs at the company. under the influence. They were put in the box asking applicants whether they It also has started a policy center entry-level positions processing had a criminal background, and the whose mission is to help people who transactions and servicing accounts new policy center will advocate for have been in jail reenter the workforce. and loans. federal and local governments to find In announcing the initiative, In a shareholder note last year, other ways to make hiring fairer for JPMorgan Chase Chairman and Dimon said that the company has a those who have been convicted of a Chief Executive Jamie Dimon said “responsibility” to hire former prisoners. crime. businesses need to do their part to “The overwhelming majority of The policy center is also advocating reduce recidivism — which will, in turn, Americans who are incarcerated return for changes to state and federal laws benefit them by bringing in talented to their communities after they are that would make it easier to expunge

4 American Banker December 2019

004_ABM1219 4 11/7/2019 1:13:40 PM Loomis Managed Cash Services

Transform your financial business with a partner you can trust.

Loomis is proud to offer financial institutions a full Comprehensive cash management range of configurable solutions that help increase Full processing and vaulting services, with operational efficiency and presence without having complete visibility and robust reporting to grow the physical footprint. These services, backed by the industry’s largest cash distribution network, Leading cash-in-transit services advanced technology, and unmatched support and The most secure armored transport, with a service, are designed to cut costs, reduce risk, state-of-the-art fleet and the best-trained staff diversify client offerings, and boost profitability. The nation’s leading ATM service provider End-to-end ATM solutions, scalable cash forecasting, and outstanding maintenance Accuracy, dependability, and superior and security performance for your financial institution A partner in Treasury Management A relationship that can help diversify offerings, scale clients’ businesses, and reduce risk loomis.us/managedservices The Loomis advantage Service, support, transparency, and a commitment to excellence from the industry leader

32892_Loomis_Financial_Services_Media_Creative_2018_American_Banker_PROD.indd005_ABM1219 5 1 11/11/20193/1/18 4:42:18 9:56 PM AM Briefings

records and to reinstate Pell grants for These are ambitious students and it-quality populace; the majority are prisoners to help them take college young professionals coming to the U.S. prime and super-prime,” she said. “We classes ahead of their release. to pursue their next great opportunity.” bring all of that information over, put it JPMorgan appointed Heather Amex has worked with the fintech in a U.S. frame of reference, and Higginbottom, a former U.S. deputy startup Nova Credit to launch a new reinterpret the score into a U.S. secretary of state for management and service that uses credit reports and paradigm. It sort of removes that resources in the Obama administration, scores from five countries — Australia, invisibility that this population has to run the policy center. Canada, India, Mexico and the U.K. when they first arrive in the country.” The company supported reforms — to issue Amex’s personal credit In the five countries from which proposed last year by the Federal cards, including Green, to newcomers Amex is accepting credit bureau data, Deposit Insurance Corp. that would to the U.S. the local bureaus report how people ease restrictions on banks hiring Other fintechs provide credit cards borrow and repay money, just as they workers who have been convicted of to immigrants. TomoCredit, for do here. What is different in those other crimes related to breach of trust or instance, offers credit cards to students countries, according to Davies, is the money laundering. and young professionals with no credit diversity of product types. In the U.S., The proposal would allow banks to score and no credit history. Petal there is a fairly narrow spectrum of hire people whose crimes are related to provides a credit card for so-called cards, loans and mortgages. Other bouncing checks of certain sizes, credit invisibles. Approvals are largely countries have microfinance loans, small-dollar theft and one-time, minor tied to cash flow rather than credit savings club loans, gold-backed loans offenses committed as young adults. scores, though scores are considered if and other products with different available. repayment terms and structures that Capital One, U.S. Bank and Discover do not exist here. Immigrants also offer secured cards that foreigners “But everything fundamentally gets can obtain. down to what have you borrowed and welcome here But the Amex-Nova effort is the first how have you repaid, and that has American Express courts ‘an attempt to use credit bureau work done allowed us to bring all this information attractive set of borrowers’ in other countries to lend in the U.S. into a consistent interpretation,” Davies with an approach that is a first In a pilot Amex has been running, said. “That’s the key function that Nova “newcomers from these five countries has been performing on the credit data Over the past five years, 10 million visas are more than five times as likely to be from all these different countries.” and green cards have been issued to approved as they would be through Nova’s technology translates the immigrants in the United States. traditional underwriting solutions for foreign credit bureau reports into data, But when they apply for a credit new-to-credit applicants,” Milsten said. formatting and scores that a U.S. card card or loan — no matter how solid Nova and Amex have found that issuer or bank underwriting system can their creditworthiness in their home “credit behaviors don’t change when make sense of. Data queries are made country — these newcomers tend to be people move across borders,” she to the credit bureaus, and knowl- rejected because of their lack of credit added. “So if you exhibited strong edge-based authentication is used to history in this country. credit behavior in one market, the help verify the identity of the applicant. This is a missed opportunity, said likelihood is that as you move through This information is sent through an Sara Milsten, senior vice president of another market, you will behave application programming interface into new member acquisition for U.S. similarly.” Amex’s online application system, consumer services at American Exchange students and immigrants which then enables the company to Express. “Most of them exhibit prime or in specialized professions tend to have make a quick decision and provide a super-prime credit behavior, so they’re thick credit files and high credit scores virtual card immediately. A plastic or an attractive set of borrowers,” she in their home countries, according to metal card can be mailed later. said. “The majority of these visa types Sarah Davies, head of risk and analyt- Before the pilot, if someone from fall into categories that include pursuit ics at Nova. one of the five countries who did not of education and special occupation. “This is an incredibly high-cred- have a credit history in the U.S. tried to

6 American Banker December 2019

006_ABM1219 6 11/7/2019 1:13:41 PM it-quality populace; the majority are apply for a card, Amex would take the collect and report information about card customers who open accounts prime and super-prime,” she said. “We application offline for review and try to the race and gender of residential using digital channels. So far this year, bring all of that information over, put it get enough information to make an mortgage applicants. the digital-first effort has brought in in a U.S. frame of reference, and underwriting decision, Milsten said. A lot of important decisions remain about $4 billion of consumer deposits reinterpret the score into a U.S. “The process felt very different for to be made — including how much — two-thirds of which have come from paradigm. It sort of removes that the prospective applicants, and our data will be collected, about which outside of its branch footprint. invisibility that this population has ability to successfully extend credit was products, and from which companies. It’s a different approach than the when they first arrive in the country.” lower,” given the lack of information The event at CFPB headquarters in one taken by rivals JPMorgan Chase In the five countries from which available, she said. ” — Penny Crosman Washington marked a step forward in and Bank of America, both of which Amex is accepting credit bureau data, that process. have been chasing deposits by opening the local bureaus report how people CFPB Director Kathy Kraninger branches in select markets where they borrow and repay money, just as they Let there be promised to use “great care” in devising previously had no retail presence. do here. What is different in those other the rules, as she alluded to industry On Citi’s third-quarter earnings call, countries, according to Davies, is the ‘sunshine’ worries about a possible curtailment of Chief Executive Michael Corbat said diversity of product types. In the U.S., Long-delayed rules should credit to small businesses. that the company intends to stick with there is a fairly narrow spectrum of benefit small-business lending Yet those who spoke at the event the digital strategy — for now. cards, loans and mortgages. Other were largely upbeat. “I wouldn’t rule out branch openings, countries have microfinance loans, For a measure that’s languished in They did offer mixed views about the but first it’s going to come from digital savings club loans, gold-backed loans bureaucratic limbo for nine years, the burden that the data collection is likely engagement,” Corbat said. and other products with different Dodd-Frank Act’s requirement that to place on lenders, with some saying it Brian Kleinhanzl, an analyst with repayment terms and structures that lenders start collecting and reporting would be a challenge. But Maureen Keefe, Bruyette & Woods, said Citi do not exist here. data on small-business loans actually Busch, vice president of compliance at might have problems sustaining growth “But everything fundamentally gets seems to have a lot of support. the Bank of Tampa, said banks already in digital deposits once it works through down to what have you borrowed and At a forum the Consumer Financial collect much of the necessary data, its “wide net” of existing cardholders how have you repaid, and that has Protection Bureau convened in early under the Community Reinvestment likely to open accounts. allowed us to bring all this information November, financial industry represen- Act. She argued that the CFPB’s rules “In digital by itself, you’ll get an initial into a consistent interpretation,” Davies tatives said that the long-awaited rules should cover alternative lenders, which boost and that’s what they got,” said. “That’s the key function that Nova can help protect against discrimination are not subject to the 1977 law. Kleinhanzl said. “From here, we expect has been performing on the credit data and curtail unsavory practices in the “It shouldn’t just be the traditional it to be more of a challenge than that.” from all these different countries.” small-business credit sector. providers,” she said. — Kevin Wack Citi reported $191.6 billion in North Nova’s technology translates the “The business community will benefit American consumer deposits for the foreign credit bureau reports into data, from this rule,” said Brad Blower, vice third quarter, up 5% from the same formatting and scores that a U.S. card president of consumer practices at Digital first period last year. issuer or bank underwriting system can American Express. “We don’t need to be If the $2 trillion-asset company make sense of. Data queries are made scared by some sunshine.” but flexible wants to increase overall deposits to the credit bureaus, and knowl- Richard Neiman, LendingClub’s head Citi’s deposit strategy doesn’t substantially, Kleinhanzl said it would edge-based authentication is used to of public policy, said the rules can foster rule out branch openings have to take a harder look at adding help verify the identity of the applicant. a market-based, pro-innovation physical locations in new markets. This information is sent through an approach to regulation. “We believe Citigroup’s strategy of growing deposits Citi has just 700 U.S. branches, application programming interface into that the collection of data will encour- by marketing checking and savings primarily in major metropolitan Amex’s online application system, age the market to address both the accounts to its credit card customers is markets. JPMorgan, by contrast, has which then enables the company to lack of access to affordable small-busi- paying off, but it could opt later on to about 5,000 branches and BofA about make a quick decision and provide a ness credit and the unfortunate rise of open branches in new markets to keep 4,300. Even regionals far smaller than virtual card immediately. A plastic or irresponsible lending,” he said. the momentum going. Citi in asset size, such as Fifth Third metal card can be mailed later. The CFPB is charged with writing the Citi said its U.S. consumer bank took Bancorp in Cincinnati and Regions Before the pilot, if someone from small-business lending rules, which bear in about $2 billion of deposits in the Financial in Birmingham, Ala., have one of the five countries who did not a resemblance to the long-standing third quarter, largely by offering such roughly twice as many branches as it have a credit history in the U.S. tried to requirement that consumer lenders perks as points and cash back to credit does. — Jon Prior

americanbanker.com December 2019 American Banker 7

007_ABM_1219 7 11/8/19 1:17 PM Bank Technology

income, proof of other things. What a cumbersome process.” The bank has used Upstart’s AI software, which it says is “completely digital and seamless.” TCF also hopes AI will give it a competitive advantage. “If we were to underwrite like everybody else, with a traditional FICO and debt-to-income grid, it would come to a very similar outcome, with a very similar approval rate, and that doesn’t seem to be the case” with the Upstart software, Carroll said. “Our mission for TCF is to allow access whenever possible at a really good rate.”

The bias question As bankers begin experimenting with AI, an overarching concern shared by regulators, policymakers, consumer advocates and lenders is that bias could be built into a lending algorithm that’s looking at various data sets. For A new frontier in loan underwriting instance, if data on higher education is included, the software could favor First National Bank of Omaha and TCF National Bank in Detroit are among the people who have degrees and neglect traditional lenders starting to try out artificial intelligence for credit decisions groups that statistically have lower college attainment rates. By Penny Crosman Butterfield had to overcome internal worries that the AI software might be biased. In part he does so by noting the Though online players like LendingClub, Wright, chief product officer for software to see if it could expand “models in existence today are not Kabbage and Upstart, and auto lenders consumer information services at the access to credit. perfect.” like Ford Motor Credit use artificial credit reporting company. “It’s about inclusion,” said Marc “I asked our chief credit officer to intelligence every day in loan decisions, “Machine learning as an application Butterfield, senior vice president of prove to me that FICO isn’t biased,” he most traditional financial institutions of AI is becoming more prevalent in digital and payment solutions at the said. “We need to be open to trying have stayed away, continuing to rely on lending because of its ability to auto- bank. The hope is to be able to serve different things, especially if the data factors like credit scores and debt-to-in- matically improve performance,” Wright more customers, with better rates and looks promising.” come ratios for underwriting. But there said. “This can result in increased better products, he said. Carroll sees it similarly. “All models are signs that is starting to change. customer acquisitions, reduced risk, and TCF National Bank in Detroit had are biased in one way or another,” she Freddie Mac is partnering with overall process efficiency.” similar goals for its test of AI in lending. said. ZestFinance on a pilot of AI-based And a few banks are actually piloting “No. 1 was the process itself,” said TCF applies the same discipline of mortgage underwriting software. Some the use of AI platforms to make lending Rita Carroll, executive vice president of continuous monitoring and testing with large, global banks, meanwhile, are decisions. consumer lending at the $47 billion-as- the AI lending that it applies with using an Experian sandbox to build Among them are $23 billion-asset set bank. “In traditional underwriting, in-house models. explainable AI models as part of their First National Bank of Omaha, which you have to upload a bunch of pay Jackson Mueller, associate director credit decisions, according to Greg wanted to try AI-based lending stubs, provide all sorts of proof of of the Center for Financial Markets at

8 American Banker December 2019 americanbanker.com

008_ABM1219 8 11/11/2019 1:16:52 PM income, proof of other things. What a the Milken Institute, can point to keep FICO scores in its models because cumbersome process.” multiple studies that find benefits in AI, it doesn’t want to throw out any data The bank has used Upstart’s AI including a report in May that found that might have some value. software, which it says is “completely algorithms used by fintech lenders He also pointed out AI-based digital and seamless.” discriminate 40% less than face-to¬- lending models’ fairness can be TCF also hopes AI will give it a face lenders. monitored and measured by looking at competitive advantage. But Mueller also acknowledges that their results. “You go, what’s the “If we were to underwrite like it’s a controversial area, and each new outcome of this? Was this decision fair? everybody else, with a traditional FICO study can have an outsize impact. Are we treating people equitably?” he and debt-to-income grid, it would come “It only takes one bad report to come said. “You ask the same questions no to a very similar outcome, with a very out to overshadow all the positive ones matter what the underlying model is.” similar approval rate, and that doesn’t that have been introduced,” he said. Another issue regulators bring up seem to be the case” with the Upstart around the use of AI in lending is that software, Carroll said. “Our mission for Regulators’ concerns decisions have to be clearly explained TCF is to allow access whenever Many banks are unwilling to test AI — no “black boxes” allowed. Every AI possible at a really good rate.” because they fear how regulators will underwriting software vendor says that react. The banks moving forward with it has built functionality into its The bias question the technology agree it’s important to platform to address this, and that its As bankers begin experimenting with keep examiners informed. systems can explain decisions more AI, an overarching concern shared by TCF has quarterly meetings with clearly than humans can. regulators, policymakers, consumer examiners from the Office of the advocates and lenders is that bias Comptroller of the Currency in which it The results could be built into a lending algorithm keeps them up to date on the AI The Upstart-enabled loan is a brand- that’s looking at various data sets. For lending project. It also communicates new product for TCF, but it has made A new frontier in loan underwriting instance, if data on higher education is with the OCC’s Office of Innovation. thousands of the loans so far. included, the software could favor “In all sincerity they’re trying to catch “The customers love it. The branch First National Bank of Omaha and TCF National Bank in Detroit are among the people who have degrees and neglect up to understand what exactly is going employees love it,” Carroll said, adding traditional lenders starting to try out artificial intelligence for credit decisions groups that statistically have lower on,” Carroll said, adding that regulators that even customers who are declined college attainment rates. still need to update model validation still have positive comments about the By Penny Crosman Butterfield had to overcome internal policies from 2011. “The language and experience. worries that the AI software might be the policies no longer apply.” One challenge was deploying the biased. In part he does so by noting the Butterfield said First National has hybrid approach: allowing applicants to software to see if it could expand “models in existence today are not made a deliberate culture shift to be be served online and in the branches. access to credit. perfect.” more proactive on the regulatory front. “A lot of our branch employees are “It’s about inclusion,” said Marc “I asked our chief credit officer to Both TCF and First National embed used to being that helper to the Butterfield, senior vice president of prove to me that FICO isn’t biased,” he their normal credit policies, which customer and nothing was taken away digital and payment solutions at the said. “We need to be open to trying include traditional credit metrics like from them,” Carroll said. “So it’s a lot of bank. The hope is to be able to serve different things, especially if the data FICO score and debt-to-income ratio, in change management. But overall you more customers, with better rates and looks promising.” the AI software. (The software can also couldn’t have a better experience.” better products, he said. Carroll sees it similarly. “All models ingest many other kinds of data, First National is just completing its TCF National Bank in Detroit had are biased in one way or another,” she including education and employment pilot, which began in July. It has lent similar goals for its test of AI in lending. said. information.) tens of millions of dollars so far. “No. 1 was the process itself,” said TCF applies the same discipline of One reason they’ve kept FICO scores The bank’s net promoter score Rita Carroll, executive vice president of continuous monitoring and testing with in the new models is that they have to among these borrowers has been “off consumer lending at the $47 billion-as- the AI lending that it applies with report borrowers’ average FICO scores the charts,” Butterfield said, adding that set bank. “In traditional underwriting, in-house models. to regulators. the bank is open to doing more testing. you have to upload a bunch of pay Jackson Mueller, associate director Jeff Keltner, general manager at “We’re figuring out what’s our overall stubs, provide all sorts of proof of of the Center for Financial Markets at Upstart, said the online lender tends to risk appetite for Upstart-type loans.” □

americanbanker.com December 2019 American Banker 9

009_ABM1219 9 11/11/2019 1:16:55 PM Bank Technology

group of executives involved in the At the same time, Bessant has said Kralingen said. IBM is also vowing that Banking gets project included Cathy Bessant, BofA’s all along that BofA would not use a it will keep this cloud updated to meet chief operations and technology officer, public cloud unless the cloud provider changing compliance requirements. its own cloud and van Kralingen. had a wealth of controls that match the Though IBM is not traditionally the The Bank of America-IBM The cloud is expected to run on IBM’s “cocoon” the company has placed lowest cost provider, this financial collaboration addresses issues existing public cloud, which uses Red around its own internal cloud in the services cloud will be “priced competi- that deter bank adoption of Hat OpenShift as its primary Kuberne- areas of security, privacy and compli- tively,” van Kralingen said. She declined cloud computing tes environment to manage container- ance. And the economics would have to to be more specific. ized software across an enterprise, and make sense. Bank of America played a role in includes more than 190 API-driven, BofA’s work with IBM on a finan- Promontory’s role creating a new public cloud specially cloud-native platform-as-a-service cial-services-ready public cloud is Promontory Financial Group, the designed for the banking industry. products to create new and enhanced meant to ensure that the highest consulting company founded by former The special-purpose cloud has cloud-native apps. Container software standards get incorporated into the Comptroller of the Currency Eugene security, privacy and bank-specific provides certain functions, like security, technology, “to have the right home for Ludwig that IBM bought in 2016, has regulatory compliance built in. in a wrapper within which applications our own workloads,” Bessant said. been part of this cloud effort. For the The design is meant to address run and can be moved from one cloud It’s also intended to help the third past year, Ludwig’s team has gone challenges that hold banks back from to another. parties with which BofA works use through hundreds of regulatory adopting cloud computing. fourth-party cloud providers “to enable compliance rules to help build the IBM, along with its regulatory BofA’s cloud journey the creation of a stack that is compliant controls banks need to have in place. compliance arm Promontory Financial BofA has been on an internal cloud by design for them,” Bessant said. “This was an important project Group, partnered with BofA to create journey since 2013, two years before Compliant by design is helpful for because it’s the first public cloud for the new cloud. Microsoft Azure even existed. banks too. “Today some of the midsize banks with a regulatory backbone,” “We believe that the whole industry “We started out focused on efficiency and smaller financial institutions have a Ludwig said. “Making sure that it has has some unique challenges with the of utilization and expense efficiency,” hard time putting together a compliant the regulatory backbone appropriate public cloud around compliance, Bessant said. by design stack because they don’t have for banks takes a lot because, appropri- security and resiliency,” said Bridget She said 80% of the company’s the leverage individually,” Bessant said. ately, banks have quite a number of van Kralingen, senior vice president for workloads run in its private cloud. BofA The IBM cloud is also designed to requirements relating to their technolo- global industries, clients, platforms and does not run anything in a public cloud, help with burst-capacity needs. gy infrastructure, and helping to marry blockchain at IBM. “Governance, risk other than in test mode. Currently, BofA has to maintain more those requirements with the technology and compliance consumes around 20% The private cloud has achieved the servers than it needs for its day-to-day behind a public cloud takes a meticu- of the operations costs of most major efficiencies Bessant sought. Where BofA computing to accommodate spikes in lous amount of review.” banks.” once had 200,000 servers and 60 data activity, such as running a stress test or Regulations that impact cloud The requirements for security and centers, it’s pared that down to 70,000 threat detection. In a cloud shared with computing include federal regulators’ data protection change continually, as servers and 23 data centers. other banks, all would share the cost of vendor management and digital does regulation in general, van Kralin- Through benchmarks, the company that extra capacity. banking guidelines, the New York gen said. “Because of that, many banks has found that its private cloud is 29% Another advantage is that IBM will cybersecurity law and California’s data have not moved their production cheaper than other service providers. It vet third-party software providers privacy law. workloads to public cloud providers,” now spends $2.1 billion less per year on before allowing them onto its cloud. “This technology offers a speed and she said. “There is not enough focus on infrastructure than it did in 2012, due in “If you’re a big financial institution efficiency that’s profound,” Ludwig said. those specific control requirements for large part to the private cloud. today, you can build custom controls “But this technology, like any technolo- the industry.” But Bessant recognizes that public and compliance,” van Kralingen said. “If gy for banks, is truly only accessible if it BofA and IBM executives have cloud computing is bound to become you’re small, not really.” meets all the regulatory requirements collaborated since March on a set of the most cost-efficient option eventual- Being able to use software that’s for safety and soundness and other controls that provide their cloud with ly. “While the economics [of an internal already met the compliance, security compliance obligations that banks proactive and automated security and cloud] are great today, they’re not and privacy requirements laid out by have.” use the highest level of encryption going to be great forever for us,” she BofA and IBM “is game-changing for Promontory is also building compli- certification, van Kralingen said. The said. many players in the ecosystem,” van ance with rules from other countries,

10 American Banker December 2019 americanbanker.com

010_ABM1219 10 11/11/2019 1:16:56 PM At the same time, Bessant has said Kralingen said. IBM is also vowing that such as Europe’s General Data Protec- all along that BofA would not use a it will keep this cloud updated to meet tion Regulation, into the cloud. So a New mission public cloud unless the cloud provider changing compliance requirements. bank that operates in other countries Automated-savings app now had a wealth of controls that match the Though IBM is not traditionally the could use this cloud globally and not helps users reduce debt too “cocoon” the company has placed lowest cost provider, this financial have to worry about violating other around its own internal cloud in the services cloud will be “priced competi- countries’ rules. Digit, the fintech that helps customers areas of security, privacy and compli- tively,” van Kralingen said. She declined IBM will not only vet third parties automatically add to savings, is turning ance. And the economics would have to to be more specific. that use this platform for compliance, its attention to tackling student loan make sense. security and privacy, it will maintain debt, with some help from BBVA’s open BofA’s work with IBM on a finan- Promontory’s role compliance on the cloud as regulations banking platform. cial-services-ready public cloud is Promontory Financial Group, the change. “Promontory will play a key The Digit mobile app — which meant to ensure that the highest consulting company founded by former role in ensuring that the platform stays analyzes users’ income and spending to standards get incorporated into the Comptroller of the Currency Eugene ahead of the changes in regulations,” determine how much money they can technology, “to have the right home for Ludwig that IBM bought in 2016, has Ludwig said. stock away without missing it — just our own workloads,” Bessant said. been part of this cloud effort. For the This is a large responsibility for recently began to help them make It’s also intended to help the third past year, Ludwig’s team has gone Promontory. But Ludwig pointed out extra payments on their student loans. parties with which BofA works use through hundreds of regulatory that even with Promontory’s help, banks “There are 40 million Americans with fourth-party cloud providers “to enable compliance rules to help build the will have to make sure they’re in $1.5 trillion in student loan debt and a the creation of a stack that is compliant controls banks need to have in place. compliance too. lot of them are financially insecure,” by design for them,” Bessant said. “This was an important project said Ethan Bloch, Digit’s chief executive. Compliant by design is helpful for because it’s the first public cloud for Enabling fintech partnerships In 2017, 65% of college seniors banks too. “Today some of the midsize banks with a regulatory backbone,” Increasingly, banks’ software vendors graduated with student debt. Among and smaller financial institutions have a Ludwig said. “Making sure that it has and fintech partners want to do things those graduates, the average student hard time putting together a compliant the regulatory backbone appropriate in the cloud, van Kralingen said. debt amount is $28,650. The average by design stack because they don’t have for banks takes a lot because, appropri- “Banks need to be very agile and U.S. household with student debt owes the leverage individually,” Bessant said. ately, banks have quite a number of work with fintechs and other providers, $47,671. The IBM cloud is also designed to requirements relating to their technolo- so they have a delicate balance in max- Digit’s customers can now save for a help with burst-capacity needs. gy infrastructure, and helping to marry imizing the promise of data, delivering trip, make extra credit card payments Currently, BofA has to maintain more those requirements with the technology better services, but also making sure and make extra student loan payments servers than it needs for its day-to-day behind a public cloud takes a meticu- that trust occurs,” she said. via the app, which charges users $5 a computing to accommodate spikes in lous amount of review.” Banks vary widely in their ability to month. activity, such as running a stress test or Regulations that impact cloud use third-party cloud services, Bessant The service is an example of BBVA’s threat detection. In a cloud shared with computing include federal regulators’ said. Small banks often have to use an open banking platform in action. Digit other banks, all would share the cost of vendor management and digital off-the-shelf product, whereas large was one of the first fintechs to use the that extra capacity. banking guidelines, the New York banks create their own controls around platform and the relationship continues Another advantage is that IBM will cybersecurity law and California’s data cloud computing. to deepen. vet third-party software providers privacy law. Bessant indicated that she sees this Several student lenders, including before allowing them onto its cloud. “This technology offers a speed and as a business and culture change. “We Navient, Gradient, Nelnet, Fedloans and “If you’re a big financial institution efficiency that’s profound,” Ludwig said. have looked each other in the eye American Education Services, have today, you can build custom controls “But this technology, like any technolo- numerous times during all of this and agreed to accept the extra payments and compliance,” van Kralingen said. “If gy for banks, is truly only accessible if it said, this could revolutionize a lot of the from Digit to pay off student loans. you’re small, not really.” meets all the regulatory requirements way we think about technology that Digit didn’t work with the lenders direct- Being able to use software that’s for safety and soundness and other supports all of our development and ly. Through Digit’s partnership with already met the compliance, security compliance obligations that banks our production,” she said. “I think of this BBVA, the bank makes the payments. and privacy requirements laid out by have.” a business strategy announcement The student loan servicers are on BofA and IBM “is game-changing for Promontory is also building compli- more than a cool tech announcement, BBVA’s list of billers that accept its many players in the ecosystem,” van ance with rules from other countries, even though it is both.”— Penny Crosman electronic payments. — Penny Crosman

americanbanker.com December 2019 American Banker 11

011_ABM1219 11 11/11/2019 1:16:56 PM BANKER OF THE YEAR Citizens Financial Group’s Bruce Van Saun

It wasn’t long ago that the WHEN BRUCE VAN SAUN TOOK OVER AS CHIEF EXECUTIVE of Citizens Financial Group in late 2013, the Providence, R.I., Providence, R.I., company was company was fading into irrelevance. struggling to remain relevant. By then, most regional banks that had been hobbled by Thanks to Van Saun and his the financial crisis were back in growth mode after a long period of retrenchment. management team — and a An exception was Citizens, whose parent company at the well-timed spinoff from Royal time, Royal Bank of Scotland, had all but stopped investing in its U.S. operations since being seized by the British Bank of Scotland — Citizens is government five years earlier. on the rise. While its competitors were ramping up lending, pursuing new revenue sources and investing in technology aimed at improving service and efficiency, Citizens was going in By Alan Kline reverse. Total assets had shrunk by 25% from pre-crisis levels and the bank unit was losing deposit share in several of its key markets, including Boston and Philadelphia. A lot has changed in six years. Under Van Saun and his management team — and thanks in no small part to its well-timed spinoff from RBS — Citizens today is a thoroughly transformed company. Its commercial loan portfolio is growing faster than the industry average as the bank has moved into new markets, invested in new business lines and added a host of new fee-based services that have helped it attract larger, more sophisticated corporate clients. Home and consumer lending are thriving too, after Citizens’ fortuitous acquisition of a mortgage lender, the expansion of its student lending program and its bold foray

12 American Banker December 2019 americanbanker.com

012_ABM1219 12 11/11/2019 11:31:42 AM BANKER OF THE YEAR Citizens Financial Group’s Bruce Van Saun

WHEN BRUCE VAN SAUN TOOK OVER AS CHIEF EXECUTIVE of Citizens Financial Group in late 2013, the Providence, R.I., company was fading into irrelevance. By then, most regional banks that had been hobbled by the financial crisis were back in growth mode after a long period of retrenchment. An exception was Citizens, whose parent company at the time, Royal Bank of Scotland, had all but stopped investing in its U.S. operations since being seized by the British government five years earlier. While its competitors were ramping up lending, pursuing new revenue sources and investing in technology aimed at improving service and efficiency, Citizens was going in reverse. Total assets had shrunk by 25% from pre-crisis levels and the bank unit was losing deposit share in several of its key markets, including Boston and Philadelphia. A lot has changed in six years. Under Van Saun and his management team — and thanks in no small part to its well-timed spinoff from RBS — Citizens today is a thoroughly transformed company. Its commercial loan portfolio is growing faster than the industry average as the bank has moved into new markets, invested in new business lines and added a host of new fee-based services that have helped it attract larger, more sophisticated corporate clients. Home and consumer lending are thriving too, after Citizens’ fortuitous acquisition of a mortgage lender, the expansion of its student lending program and its bold foray

americanbanker.com December 2019 American Banker 13

013_ABM1219 13 11/11/2019 11:31:44 AM into point-of-sale financing for forces in hopes of better competing tant and partner at Bain & Co., whose from RBS was fully completed 14 products such as iPhones, home with those giants, Van Saun said he focus was helping companies improve months later. In all, the public offering security systems and, most recently, believes Citizens can continue to thrive the customer experience to drive raised $3 billion for RBS, making it the Microsoft’s Xbox. by sticking to what’s been working for growth. largest IPO for a commercial bank in And Citizens, once a tech laggard, is the last six years: hiring good leaders Johnson, now the chief marketing U.S. history. now seen as an innovator. A stand- and staying relentlessly focused on the officer and head of virtual channels, Van Saun had many priorities during alone, digital-only bank it launched in needs of the customer. said she didn’t know Van Saun, but that period, but one of the most mid-2018 has already amassed nearly “If you’re a trusted adviser to signed on quickly after meeting him. important was improving meager $6 billion of deposits and attracted individuals on their life journey or to “He created such a compelling vision profitability ratios. customers in all 50 states. companies navigating business for where he wanted to take the bank, In its first quarter as a publicly For his leadership in positioning challenges, if you show up at every what it was going to take to get there traded company, Citizens posted a Citizens as a regional bank with staying touchpoint with good ideas that add and how he needed talented people to return on tangible common equity of power, Van Saun is American Banker’s value to the relationship, then they help him get there,” she said. “It was 6.1%, which was significantly below the Banker of the Year for 2019. have no reason to move away from really powerful.” average of its peer group at the time. The success of the turnaround is you,” Van Saun said. Another key hire was Don McCree, a During one of his first earnings calls evident in the numbers. Total assets former head of corporate banking at with analysts, Van Saun predicted that have rebounded to pre-crisis levels, at JPMorgan Chase. McCree had retired Citizens’ ROTCE would reach 10% by nearly $165 billion as of Sept. 30, and Largest-ever bank IPO from JPMorgan Chase a year earlier the end of 2016 — a goal some key profitability metrics, such as After Van Saun arrived at Citizens, one and was looking for a career outside of analysts viewed as overly ambitious efficiency ratio and return on tangible of his first big decisions in advance of banking when he got a call from Van considering the Federal Reserve’s common equity, have significantly the September 2014 initial public Saun to gauge his interest in becoming benchmark interest rate was still near improved, especially in the last two offering was selling roughly 100 Citizens’ vice chairman for commercial zero. Moreover, it had been roughly a years. Chicago-area branches, as well as banking. decade since Citizens had last posted It’s evident, too, in Citizens’ rising small-business operations and select Like Johnson, McCree said he was double-digit returns. employee engagement and reputation middle-market relationships in the drawn to the opportunity to help turn a “Part of [Van Saun’s] thesis was that scores. In American Banker’s most region, to U.S. Bancorp for about $315 company that had suffered from returns would be boosted by a high- recent reputation rankings, only two million. chronic underinvestment into a high er-rate environment, and that was U.S. banks scored higher with custom- Citizens had struggled to capture performer that delivers results for going to take a few years to happen,” ers than Citizens. market share in Chicago since entering customers and investors. said Terry McEvoy, an analyst at Van Saun, 62, is the first to admit Stephens Inc. that Citizens “has work to do to Besides, he said, “Citizens was not become the top-performing bank we “When I think about my legacy ... viewed as a great competitor then, and aspire to be.” I hope what people say about me is structural change, for a company its He noted that Citizens’ fee income size, was going to take some time.” as a percentage of revenue, while that I was committed to developing improving, still lags its peers. He also talent,” Van Saun says. said the bank needs to upgrade some Business transformation of its technology to cut costs and speed McEvoy was right: It would take a little delivery of services so that it doesn’t the city with its acquisition of Charter “I’m not unique,” McCree said. “We’ve longer than two years for Citizens to lose ground to deep-pocketed rivals One Bank 10 years earlier, and a sale been able to hire an enormous number finally post a double-digit return on like Bank of America and JPMorgan would allow the company to invest the of people who are very qualified, very tangible common equity. Chase. proceeds into other areas, Van Saun experienced, and they are joining for Still, Citizens finally crossed that “We’re good compared to where we said. the same reason I did — which is to mark in the third quarter of 2017 — and were, and we’re good compared to He also started to remake his operate in an entrepreneurial environ- it hasn’t looked back since. For this other regionals, but we have to keep leadership team, using the pending ment, focus on client service and take year’s third quarter it posted a return our eye on the megabanks,” he said. IPO as incentive to attract top talent. the company down an exciting path.” on tangible common equity of 12.44%. Still, in a year in which some large Among his first hires was Beth The first phase of the IPO took place Meanwhile, its efficiency ratio, which and midsize banks have opted to join Johnson, a longtime industry consul- in September 2014, and the spinoff was hovering near 70% five years ago,

14 American Banker December 2019 americanbanker.com

014_ABM1219_001 14 11/11/2019 1:18:45 PM tant and partner at Bain & Co., whose from RBS was fully completed 14 focus was helping companies improve months later. In all, the public offering the customer experience to drive raised $3 billion for RBS, making it the growth. largest IPO for a commercial bank in Johnson, now the chief marketing U.S. history. officer and head of virtual channels, Van Saun had many priorities during said she didn’t know Van Saun, but that period, but one of the most signed on quickly after meeting him. important was improving meager “He created such a compelling vision profitability ratios. for where he wanted to take the bank, In its first quarter as a publicly what it was going to take to get there traded company, Citizens posted a and how he needed talented people to return on tangible common equity of help him get there,” she said. “It was 6.1%, which was significantly below the really powerful.” average of its peer group at the time. Another key hire was Don McCree, a During one of his first earnings calls former head of corporate banking at with analysts, Van Saun predicted that JPMorgan Chase. McCree had retired Citizens’ ROTCE would reach 10% by Van Saun, shown here celebrating Citizens’ listing on the NYSE, is especially proud from JPMorgan Chase a year earlier the end of 2016 — a goal some of its improved score on the Organizational Health Index, a metric that measures and was looking for a career outside of analysts viewed as overly ambitious a company’s leadership, culture and employee engagement. banking when he got a call from Van considering the Federal Reserve’s Saun to gauge his interest in becoming benchmark interest rate was still near is now below 60%, and earnings per markets capabilities, acquiring two Citizens’ vice chairman for commercial zero. Moreover, it had been roughly a share have beat consensus estimates boutique M&A advisory firms, and banking. decade since Citizens had last posted from analysts in 20 consecutive greatly enhanced its trading, cash Like Johnson, McCree said he was double-digit returns. quarters. management and hedging functions, drawn to the opportunity to help turn a “Part of [Van Saun’s] thesis was that Rising rates and the cuts to corpo- all with an eye toward attracting larger company that had suffered from returns would be boosted by a high- rate income tax rates have helped, but clients. chronic underinvestment into a high er-rate environment, and that was the steadily improving performance is “We were narrow in terms of our performer that delivers results for going to take a few years to happen,” largely a result of strategic decisions product set,” McCree said. “We needed customers and investors. said Terry McEvoy, an analyst at made by Van Saun and his team, more sophisticated capabilities … to Stephens Inc. McEvoy said. basically be able to solve all of our Besides, he said, “Citizens was not “Within the targeted loans they clients’ problems.” “When I think about my legacy ... I viewed as a great competitor then, and are looking to grow, they are growing,” The myriad efforts to scale up the hope what people say about me is structural change, for a company its he said. “Within the targeted fee commercial bank have helped Citizens size, was going to take some time.” businesses — capital markets, wealth double its number of mid-corporate that I was committed to developing management, mortgages — they are clients — those with annual revenue of talent,” Van Saun says. beginning to grow. The numbers are $500 million to $3 billion — to about Business transformation showing improving trends and market 900 since 2014. Its base of middle-mar- McEvoy was right: It would take a little share gains.” ket clients — those with revenues of “I’m not unique,” McCree said. “We’ve longer than two years for Citizens to Under McCree’s leadership, commer- $25 million to $500 million — has been able to hire an enormous number finally post a double-digit return on cial loans are growing at a rate of increased by 50%, to about 3,000, of people who are very qualified, very tangible common equity. about 6% a year, to nearly $42 billion according to Van Saun. experienced, and they are joining for Still, Citizens finally crossed that at Sept. 30, as Citizens has hired On the consumer side, growth has the same reason I did — which is to mark in the third quarter of 2017 — and lending teams in the Southeast, Texas been driven largely by innovation. A operate in an entrepreneurial environ- it hasn’t looked back since. For this and California, built a syndicated student loan refinancing product ment, focus on client service and take year’s third quarter it posted a return lending division and expanded into new Citizens pioneered has helped to more the company down an exciting path.” on tangible common equity of 12.44%. areas of lending, including energy, than triple its portfolio of education The first phase of the IPO took place Meanwhile, its efficiency ratio, which health care, gaming and private equity. loans in the last five years, to $9.5 in September 2014, and the spinoff was hovering near 70% five years ago, Citizens also has built up its capital billion, while its point-of-sale financing

americanbanker.com December 2019 American Banker 15

015_ABM1219 15 11/11/2019 11:32:05 AM for iPhone upgrades and Vivint and “You have to have an engaged and His first job out of business school JPMorgan Chase’s corporate trust ADT home security systems is fueling motivated colleague base if you are was in New York, doing financial operations; and the $16.5 billion strong gains in unsecured personal going to do a great job on customer analysis and strategic planning for acquisition of Mellon in 2007 that loans. service and experience,” Van Saun said. General Mills’ nonfoods businesses, created the world’s largest custody Van Saun said that the point-of-sale “When I think about my legacy, when I which at the time included fashion, toys bank. loan program grew out of a relation- finally pack it in, I hope what people and specialty retail. Van Saun left about a year after the ship Citizens had with Apple to finance say about me is that I was committed In the mid-1980s, the company Mellon merger, because he wanted to purchases of laptops for students. to developing talent and having a great decided to exit those businesses to run a business and didn’t see a path to Apple approached Citizens about culture that’s focused on the customer.” refocus on food, and though Van Saun ever becoming CEO at BNY Mellon. He offering the service, so the bank built a was offered a new role at the corporate was 51 at the time and Bob Kelly, the point-of-sale tool that allows customers headquarters in Minneapolis, he opted former Mellon chief who became CEO to finance iPhone purchases on the The making of a CEO to look for new opportunities in New of the merged company, was just three spot in Apple stores or on the tech Van Saun has made a career of tackling York instead. years older. giant’s website, paving the way for tough challenges. He set his sights on financial He dabbled in private equity for a similar arrangements with other Before succeeding Ellen Alemany as services, a decision that was largely year and was pondering his next career merchants. Citizens’ CEO, Van Saun served as influenced by his admiration for his move when he received a call from The bank saw point-of-sale lending finance director at Royal Bank of grandfather, Grant Van Saun, who Hester in 2009 asking him to move to “as an opportunity to move into a Scotland, where he worked closely with years earlier had started the commer- London to help rescue RBS. The marketplace where there was very little CEO Stephen Hester to lead what was cial real estate practice at the old company was 80% owned by the competition,” said Brad Conner, nothing less than the largest corporate Irving Trust Bank in New York. British government at the time, and the Citizens’ vice chairman of consumer turnaround in history. He landed at the investment bank challenge for Hester and Van Saun was banking. Before that, he was a longtime chief Kidder Peabody, which was looking for figuring out which assets to sell and The service is not just benefiting financial officer at Bank of New York, someone with Fortune 500 experience which assets to keep as they sought to consumers, it’s also helping retailers sell where he helped lead its transforma- to bring discipline to its budgeting and keep the business afloat and repay a more products because “we’ve created tion from a regional bank to a custody financial planning. He stayed about five portion of the roughly $60 billion an experience that’s incredibly easy,” bank and then became a key architect years, moving up to become its taxpayers spent to bail it out. he added. of its landmark merger with Mellon controller. “We’re bomb experts, and we have Still, as proud as Van Saun is of the Financial. Then Wasserstein Perella, the to be really careful about how we pull loan growth and improved financial His leadership skills were evident boutique M&A advisory firm founded the wires out,” Van Saun recalled Hester metrics, he takes just as much pride in from an early age. Growing up in by two of Wall Street’s most high-pro- as saying at the time. Citizens’ improved score on the northern New Jersey in the 1960s and file investment bankers, recruited him Over a period of four years, RBS Organizational Health Index, a metric 1970s, Van Saun was that kid who to be its chief financial officer. Van shrank its balance sheet by about developed by McKinsey that measures organized Olympic-like competitions Saun was just 32 years old. $500 million by selling off business a company’s leadership, culture and for his friends during summer breaks A few years later he was recruited lines and loan portfolios and taking employee engagement. and that athlete who relished taking again, this time by Deutsche Bank, its auto insurance subsidiary public. When the survey was first adminis- the big shot or being at bat with the which needed a North American chief At first, Hester and Van Saun gave tered to employees, in 2015, Citizens’ game on the line. financial officer to help it dramatically little consideration to spinning off OHI score was 59 (out of 100), well out He was also a standout student, expand its U.S. investment banking Citizens because “we valued diversifica- of McKinsey’s top tier. Citizens has having grown up in a household that presence, and then moved on to Bank tion and wanted to have as many since put in a robust new “people stressed academic excellence. of New York, where in 11 years as CFO earnings drivers as we could to program” that emphasizes leadership “Sports were fun and you learned he had a hand in about 100 mergers ultimately pay back the U.K. govern- training and development, recognizes good lessons from sports, but they and acquisitions. ment,” Van Saun said. excellence across the organization and couldn’t be the be-all and end-all,” said They included Bank of New York’s But by 2013, with U.K. regulators removes bureaucracy that Van Saun Van Saun, who majored in accounting 2003 acquisition of Pershing, the pressing RBS to continue streamlining, said was preventing good ideas from at Bucknell University and later stock-trade clearing unit of Credit the decision was made to turn Citizens being implemented. received a master’s degree in business Suisse First Boston, for $2 billion; the into a standalone, publicly traded Four years later, the OHI score is administration from the University of 2006 swap of Bank of New York’s company with Van Saun at the helm. now at 72, putting Citizens just 1 point North Carolina. “You had to do well in consumer, small-business and mid- At 56, he would finally become a out of McKinsey’s top quartile. school.” dle-market banking businesses for CEO.

16 American Banker December 2019 americanbanker.com

016_ABM1219 16 11/11/2019 11:32:06 AM His first job out of business school JPMorgan Chase’s corporate trust Future challenges peer-group averages in part because was in New York, doing financial operations; and the $16.5 billion Six years in, his focus is on continuing it’s still working through the excess analysis and strategic planning for acquisition of Mellon in 2007 that to improve Citizens even more. He has capital accumulated while it was a General Mills’ nonfoods businesses, created the world’s largest custody a vision for where the company needs unit of RBS. “The capital normalization which at the time included fashion, toys bank. to go from here. is probably still in the sixth or seventh and specialty retail. Van Saun left about a year after the Van Saun acknowledged that inning,” said Brian Foran, an analyst at In the mid-1980s, the company Mellon merger, because he wanted to a shortcoming in the consumer Autonomous Research. decided to exit those businesses to run a business and didn’t see a path to strategy is that point-of-sale loans Citizens’ stock trades at a slight refocus on food, and though Van Saun ever becoming CEO at BNY Mellon. He and high-yield savings accounts at its discount to peers, and Foran said that was offered a new role at the corporate was 51 at the time and Bob Kelly, the digital bank are one-off products that could be because investors are unsure headquarters in Minneapolis, he opted former Mellon chief who became CEO aren’t really helping Citizens deepen how all those new consumer and to look for new opportunities in New of the merged company, was just three relationships. commercial loans will perform if the York instead. years older. Among his top priorities is cutting economy weakens. He set his sights on financial He dabbled in private equity for a expenses by about $300 million over Foran said the question he gets most services, a decision that was largely year and was pondering his next career the next two years and plowing some from investors “revolves around how’s it influenced by his admiration for his move when he received a call from grandfather, Grant Van Saun, who Hester in 2009 asking him to move to years earlier had started the commer- London to help rescue RBS. The Citizens, once a tech laggard, is now cial real estate practice at the old company was 80% owned by the seen as an innovator. A digital-only Irving Trust Bank in New York. British government at the time, and the He landed at the investment bank challenge for Hester and Van Saun was bank it launched in mid-2018 has Kidder Peabody, which was looking for figuring out which assets to sell and amassed nearly $6 billion of deposits. someone with Fortune 500 experience which assets to keep as they sought to to bring discipline to its budgeting and keep the business afloat and repay a financial planning. He stayed about five portion of the roughly $60 billion of the savings into technology and going to play out when the environ- years, moving up to become its taxpayers spent to bail it out. analytical tools that will help strength- ment gets tougher. Have they built controller. “We’re bomb experts, and we have en ties with those single-product themselves into a better bank that Then Wasserstein Perella, the to be really careful about how we pull customers. resembles peers, or have they overex- boutique M&A advisory firm founded the wires out,” Van Saun recalled Hester Within the digital bank, for example, tended themselves?” by two of Wall Street’s most high-pro- as saying at the time. “we are trying to work through what Foran, for his part, has an “outper- file investment bankers, recruited him Over a period of four years, RBS would be a logical product bundle to form” rating on Citizens’ stock. As he to be its chief financial officer. Van shrank its balance sheet by about expand us beyond just savings,” he sees it, the company “isn’t in hyper- Saun was just 32 years old. $500 million by selling off business said. “Checking is one, business savings growth mode” — it’s simply playing A few years later he was recruited lines and loan portfolios and taking is one, but are there other products, like catch-up after years of underinvest- again, this time by Deutsche Bank, its auto insurance subsidiary public. digital mortgages, that we can put in a ment. which needed a North American chief At first, Hester and Van Saun gave bundle and use data analytics to go “A lot of this is just regaining market financial officer to help it dramatically little consideration to spinning off after some of these one-product share and doing things other banks expand its U.S. investment banking Citizens because “we valued diversifica- customers? There is a huge opportunity have been doing for 20 years,” he said. presence, and then moved on to Bank tion and wanted to have as many if we can get that right.” Van Saun pointed out that the of New York, where in 11 years as CFO earnings drivers as we could to Another high priority is improving its makeup of the balance sheet “is so he had a hand in about 100 mergers ultimately pay back the U.K. govern- mobile platform, which Johnson, its much better than it was” before the and acquisitions. ment,” Van Saun said. head of virtual channels, said “was built financial crisis, when roughly 70% of its They included Bank of New York’s But by 2013, with U.K. regulators back when the Motorola Razor was the loans were to consumers. Today, its mix 2003 acquisition of Pershing, the pressing RBS to continue streamlining, No. 1 mobile phone in America.” of consumer and commercial loans is stock-trade clearing unit of Credit the decision was made to turn Citizens On the financial side, there is still much closer to 50-50. Suisse First Boston, for $2 billion; the into a standalone, publicly traded room for improvement on Citizens’ key “It’s taken us over a decade to get 2006 swap of Bank of New York’s company with Van Saun at the helm. profitability metrics. Its return on that balance sheet back to a size that consumer, small-business and mid- At 56, he would finally become a tangible common equity may be allows us to achieve better levels of dle-market banking businesses for CEO. climbing steadily but remains below profitability,” Van Saun said. ☐

americanbanker.com December 2019 American Banker 17

017_ABM1219 17 11/11/2019 11:32:06 AM COMMUNITY BANKER OF THE YEAR Morris Bank’s Spence Mullis

By Andy Peters

Spence Mullis surprised, and even occupied. Across the well-manicured compliance programs with the Federal amused, some of his rivals when he grass of Dublin’s Bicentennial Plaza sits Deposit Insurance Corp. He would go decided to lend money to renovate the the Carnegie Library, built in the early on to work as a Georgia banking Fred Roberts Hotel in Dublin, Ga. 1900s, and the Martin Theatre, which examiner before moving to a Dublin Once the area’s premier lodging debuted in 1934. Both predate Morris accounting firm. destination, the 1926 red-brick building Bank, which opened in 1954, but are He joined Morris Bank in 2002 as had been vacant for decades. Georgia now actively used by the community, chief financial officer and rose to State Patrol officers were using it for having been rehabbed after the Fred president in 2005. Though the bank rappelling practice. Roberts venture succeeded. was struggling with problem loans at The downtown wasn’t much to speak Mullis, 45, who can see it all from the the time, Mullis’ first move was to of, with its many boarded-up store- bank’s headquarters, takes some pride address declining morale. He created fronts and persistent crime problem. knowing the bank provided financing an employee rulebook, called Code The timing wasn’t ideal either. It was for those projects and others nearby. Blue, which mandates a pleasant 2008, and the Great Recession was As Dublin’s once-neglected down- attitude and courteous behavior while underway. Five Georgia banks failed town has bounced back, Morris Bank on the job. that year, along with 25 more in 2009. has also thrived. Its assets have “We pay people based on Code Mullis, president and chief executive increased from $115 million in 2005 to Blue,” said Mullis, who added the CEO of Morris Bank, still made the loan. $980 million today. The bank, a unit of role in 2006. Performance-based raises “Spence really stuck his neck out there, Morris State Bancshares, generated a are tied to a formula that rewards and I’m sure he had a lot of sleepless 1.7% return on assets and a 15% return adherence to the rules. nights” over the project, said Louie on equity in the second quarter, One such rule: “We believe that Curry, a Dublin real estate developer. according to call report data. hustle and getting after it every day Mullis acknowledged as much. For helping spur the revival of with a smile will lead to success.” “Most other bankers, while probably Dublin’s core commercial district, and Today, the bank encourages custom- excited that something was being done for successfully executing a growth ers to “bank blue.” to a historic building, were also relieved strategy in a primarily rural area, Mullis Fixing credit quality was the next that they weren’t the ones loaning the is being honored as American Banker’s task. At the worst point, in early 2009, money,” Mullis said. “It was very lonely Community Banker of the Year. 2.34% of the bank’s loans were to be the only banker trying to make noncurrent. That said, Morris Bank was this happen.” Repairing a bank, then a town profitable every year during the Now he looks prescient. The Fred After graduating from Georgia financial crisis. Roberts building, a mixed-used project Southern University with an accounting After clearing up the pile of deterio- with condos, shops and offices, is fully degree in 1996, Mullis completed two rating loans, Mullis tackled redevelop-

18 American Banker December 2019 americanbanker.com

018_ABM1219 18 11/11/2019 11:29:01 AM Morris Bank’s Spence Mullis

compliance programs with the Federal Deposit Insurance Corp. He would go on to work as a Georgia banking examiner before moving to a Dublin accounting firm. He joined Morris Bank in 2002 as chief financial officer and rose to president in 2005. Though the bank was struggling with problem loans at the time, Mullis’ first move was to address declining morale. He created an employee rulebook, called Code Blue, which mandates a pleasant attitude and courteous behavior while on the job. “We pay people based on Code Blue,” said Mullis, who added the CEO role in 2006. Performance-based raises are tied to a formula that rewards adherence to the rules. One such rule: “We believe that hustle and getting after it every day with a smile will lead to success.” Today, the bank encourages customers to “bank blue.” Fixing credit quality was the next task. At the worst point, in early 2009, 2.34% of the bank’s loans were noncurrent. That said, Morris Bank was profitable every year during the financial crisis. After clearing up the pile of deterio- rating loans, Mullis tackled redevelop-

americanbanker.com December 2019 American Banker 19

019_ABM1219 19 11/11/2019 11:29:03 AM ment in Dublin. It’s not something that investment qualified for about Morris Bank has a great chance to most farms are owned by national many community bankers in Georgia $780,000 in historic tax credits. revive Statesboro’s downtown, given agriculture companies that get their were doing. “It takes longer to do these loans Mullis’ persistence. “He’s an energizing financing elsewhere. “It was a leap of faith because there with historic tax credits, and they’re person to be around,” Brannen said. Dublin’s largest employer — a wasn’t much going on in downtown more complicated, but it’s great when “He’s exciting, thoughtful and strategic. 340-bed Veterans Affairs hospital — is Dublin,” Curry said. they work out,” said Mullis, who’s also You can tell he really likes being a virtually recession-proof. The town also While rural Georgia is dotted with chairman of the Dublin Downtown community banker.” has the 160-bed Fairview Park Hospital. small towns that serve as county seats Development Authority. Health care has become the area’s or regional economic hubs, those Morris Bank’s competitors are Hurdles remain biggest economic engine, Best said. communities often suffer from high coming back after abandoning the Mullis still faces numerous challenges, Physician offices and other medical unemployment and commercial area for branches closer to Dublin Mall including Dublin’s sporadic economic businesses are a big part of Morris vacancy rates. The problems have been in past decades. The $220 million-asset growth. In the past decade, Dublin was Bank’s largest loan category, commer- exacerbated as more young people Bank of Dudley built a branch two hit by the sudden departure of big new cial real estate. In 2015, the bank leave for brighter prospects. blocks from Morris Bank. The $214 factories, not long after they had provided an $8.4 million Small Business Thomaston, about 100 miles west of million-asset Swainsboro Bankshares is opened. Administration loan for the develop- Dublin, is a case in point. Thomaston renovating another 1898 building that In 2010, the German solar-panel ment of a skilled nursing home facility and Dublin are similar in size, and both originally housed the now-defunct Dub- manufacturer Mage Solar started build- for prisoners in Milledgeville, Ga. are county seats. The local economies lin Banking Co. Its Citizens Bank of ing a plant, financed partly by a A prison facility is an economic in those towns were hammered in the Laurens County unit will become the $600,000 working-capital loan from development project few towns would early 2000s when longtime textile mills building’s first bank branch in decades, Morris Bank. But Mage shut the plant have wanted. But Milledgeville, about closed. Many buildings on Thomaston’s said Jeffery Cannon, its Dublin market down five years later, citing volatility in 50 miles north of Dublin, has a long historic courthouse square remain president. the U.S. solar market. history as the site of state-operated vacant. Mullis welcomes them all. “I wish Traces of Mage remain throughout prisons and mental health facilities, Dublin is moving in the other every bank and credit union in town town, including solar-powered street- Mullis said. “The project not only made direction. Its downtown strip includes had a presence in downtown to help lights and a small, active solar farm on economic and business sense for the several popular bars, music venues and foster additional growth,” he said. the front lawn of Dublin High School. customer, it also helped a community restaurants, including a pizza parlor Plenty of Georgia towns have the “We built this beautiful new school, but that had lost so many jobs during the with a wood-fired oven. Buildings are potential for a Dublin-style comeback, you can’t see it because of the solar downturn,” he said. being renovated in accordance with in Mullis’ view. Morris Bank is prepared panels,” Mullis said, half-joking. Morris Bank also makes a lot of historic-preservation standards, to help make one happen in States- Valmiera Glass, a Latvian Fiberglas loans to homebuilders. It’s the lead allowing Morris Bank and its borrowers boro, Ga., after buying the $191 manufacturer, was at the center of a lender on Moore Station Village, a new to qualify for historic tax credits. million-asset FMB Equibanc in May. similar story. The company in 2014 development planned by Curry’s real Condos have been built on the top Like Dublin, Statesboro has a large announced plans to build a $90 million estate company. floors of many of the renovated supply of historic buildings that would plant in Dublin and create 400 jobs. The bank doesn’t have a monopoly buildings. Dublin’s mayor, Phil Best, said be perfect for restaurants, shops and The facility opened in 2018 but shut on these loan opportunities. Dublin has he and his wife recently moved into condos, Mullis said. “I can’t tell you how down a year later. The company said it nine banks in all: Wells Fargo, the one. “About 10 or 12 years ago, if we many people from Statesboro have had significant unexpected losses $11.8 billion-asset Ameris Bancorp, had visitors come in from out of town, said to me, ‘Why can’t we have what during a longer-than-expected startup the $3 billion-asset Capital City Bank we would have dodged downtown,” Dublin has?’ ” he said. phase. Valmiera’s U.S. subsidiary later Group and six other community banks. Best said, adding that three dozen Mullis decided to splurge on filed for Chapter 11 bankruptcy The $2.7 billion-asset Robins Financial families now live there. marketing after the FMB purchase, to protection. Credit Union and the $1.4 billion-asset “Mullis did some creative financing let people in Statesboro know that A skeleton crew still at the Valmiera Georgia United Credit Union also with a lot of folks who were working on Morris Bank was serious about its plans plant is slowly dismantling a multimil- operate there. “I compete with all of downtown projects,” Best said. “He took there. His bank agreed to pay $1 million lion-dollar glass furnace, Mullis said. them,” Mullis said. a chance to make it work.” over five years for the sponsorship and Agriculture is big in the area, but ag Businesses are moving in too. The signage rights at Georgia Southern loans make up less than 5% of Morris In search of opportunity Curry Maffett Insurance Agency has University’s football stadium. Bank’s $722 million portfolio. Mullis said Morris Bank needed to expand beyond settled into a restored two-floor Joe Brannen, CEO of the Georgia it’s difficult for the bank to compete on Dublin to generate growth. It bought building dating to 1898. The $2.4 million Bankers Association, said he thinks price with the Farm Credit System. Plus, the failed Gordon Bank in Gordon, Ga.,

20 American Banker December 2019 americanbanker.com

020_ABM1219 20 11/11/2019 11:29:03 AM Morris Bank has a great chance to most farms are owned by national in 2010. It expanded to Gray, a growing “We’re getting hammered by early revive Statesboro’s downtown, given agriculture companies that get their bedroom community near Macon, in paydowns,” Mullis said. “Every bank Mullis’ persistence. “He’s an energizing financing elsewhere. 2012 by hiring an 11-banker team from a here is getting hammered by paydowns. person to be around,” Brannen said. Dublin’s largest employer — a rival. In 2015 it bought a branch in Margin compression is a real thing.” “He’s exciting, thoughtful and strategic. 340-bed Veterans Affairs hospital — is Warner Robins from CertusBank. The margin is expected to tighten You can tell he really likes being a virtually recession-proof. The town also There should be more acquisition more as rates decline, but the bank’s community banker.” has the 160-bed Fairview Park Hospital. opportunities, said James Stevens, a net interest income could gradually Health care has become the area’s lawyer at Troutman Sanders in Atlanta increase “with reasonable and conser- Hurdles remain biggest economic engine, Best said. who has advised community banks in vative asset growth,” Mullis said. Mullis still faces numerous challenges, Physician offices and other medical Georgia on M&A and regulatory issues. Mullis has big plans for Dublin, including Dublin’s sporadic economic businesses are a big part of Morris “Morris Bank is significantly larger though. The father of two children, growth. In the past decade, Dublin was Bank’s largest loan category, commer- than the banks around them, and Beau, a college sophomore, and Nan hit by the sudden departure of big new cial real estate. In 2015, the bank factories, not long after they had provided an $8.4 million Small Business Mullis is “an energizing person to be opened. Administration loan for the develop- In 2010, the German solar-panel ment of a skilled nursing home facility around,” says Joe Brannen, CEO of the manufacturer Mage Solar started build- for prisoners in Milledgeville, Ga. Georgia Bankers Association. “You can tell ing a plant, financed partly by a A prison facility is an economic $600,000 working-capital loan from development project few towns would he really likes being a community banker.” Morris Bank. But Mage shut the plant have wanted. But Milledgeville, about down five years later, citing volatility in 50 miles north of Dublin, has a long they’re in a position to be a consolida- Marie, a high school sophomore, with the U.S. solar market. history as the site of state-operated tor,” Stevens said. his wife, Brandy, he intends to do his Traces of Mage remain throughout prisons and mental health facilities, The leaders of many small banks in part to ensure the town continues town, including solar-powered street- Mullis said. “The project not only made rural Georgia want to retire but have building on its momentum. lights and a small, active solar farm on economic and business sense for the few in-house candidates to take over, He wants to help Dublin develop a the front lawn of Dublin High School. customer, it also helped a community Stevens added. “A lot of these banks community walking path along the “We built this beautiful new school, but that had lost so many jobs during the have succession-planning issues.” Oconee River. you can’t see it because of the solar downturn,” he said. But Mullis said the opportunities may The downtown strip needs a panels,” Mullis said, half-joking. Morris Bank also makes a lot of be limited. Small banks in rural Georgia boutique hotel, Mullis said. He’s got his Valmiera Glass, a Latvian Fiberglas loans to homebuilders. It’s the lead may be a source of cheap deposits, but eye on one specific parcel that would manufacturer, was at the center of a lender on Moore Station Village, a new they’re in shrinking markets. And the be perfect if he can talk the owner into similar story. The company in 2014 development planned by Curry’s real deposits are likely to dry up. selling. announced plans to build a $90 million estate company. “I take calls from all these bankers “These projects are starting to make plant in Dublin and create 400 jobs. The bank doesn’t have a monopoly who ask me to buy them,” Mullis said. “I more business sense as we’ve reached The facility opened in 2018 but shut on these loan opportunities. Dublin has have to tell them that they don’t have critical mass,” Mullis said. down a year later. The company said it nine banks in all: Wells Fargo, the anything to offer Morris Bank.” Morris Bank’s top officers are still had significant unexpected losses $11.8 billion-asset Ameris Bancorp, A more immediate concern is falling years away from retiring, and Mullis is during a longer-than-expected startup the $3 billion-asset Capital City Bank interest rates, which have led to net confident his team can keep adding phase. Valmiera’s U.S. subsidiary later Group and six other community banks. interest margin compression through- assets through organic growth and filed for Chapter 11 bankruptcy The $2.7 billion-asset Robins Financial out the industry. A recent surge of early potential acquisitions. Morris Bank protection. Credit Union and the $1.4 billion-asset commercial loan payoffs has forced expects internal growth of 5% to 7% A skeleton crew still at the Valmiera Georgia United Credit Union also Morris Bank to search for lower-yielding each year, he said. plant is slowly dismantling a multimil- operate there. “I compete with all of credits and investment securities. The “I think we have a tremendous lion-dollar glass furnace, Mullis said. them,” Mullis said. bank’s profit in the first half of 2019 fell amount of runway potential as we have Agriculture is big in the area, but ag 7% from a year earlier, to $6.9 million. a moderately young management loans make up less than 5% of Morris In search of opportunity Excluding FMB, total loans rose by team,” Mullis said. “My particular role Bank’s $722 million portfolio. Mullis said Morris Bank needed to expand beyond only 4.4%, to $613 million, in that same will continue to evolve into a more it’s difficult for the bank to compete on Dublin to generate growth. It bought period. The bank’s net interest margin strategic, versus tactical, one as we look price with the Farm Credit System. Plus, the failed Gordon Bank in Gordon, Ga., shrank by 11 basis points, to 3.60%. for more growth opportunities.” ☐

americanbanker.com December 2019 American Banker 21

021_ABM1219 21 11/11/2019 11:29:04 AM Index of Advertisers

COMPANY PHONE PAGE WEBSITE Advertising Contacts

SAS INSTITUTE C2 PUBLISHER sas.com/aml MIDATLANTIC/ SOUTHEAST NY/NJ/CT/PA/ MA/RI/NH/VT/ME sas.com/ecl DAVID CLEWORTH BRAD BAVA 1160 St. Pauls Parrish Lane One State Street Plaza �� Johns Island, SC 29455 New York, NY 10004 Tel: 843.640.3713 Tel: 212.803.8829 Fax: 843.640.3966 Fax: 646.264.6800 FIFTH THIRD BANK 3 [email protected] [email protected] MIDWEST/SOUTHWEST WEST 53.com/CorporateBank SHELLY SCHMELING SARA CULLEY �� One State Street Plaza 173 Spreading Oak Drive New York, NY 10004 Scotts Valley, CA 95066 Tel: 312.932.9392 Tel: 831.212.2963 LOOMIS ARMORED 5 [email protected] Fax: 831.438.8407 [email protected] loomis.us/managedservices SERVICE CLASSIFIED ADVERTISING DIGITAL ACCOUNT SERVICES DAVID CLEWORTH �� MELISSA VILLANUEVA One State Street Plaza One State Street Plaza New York, NY 10004 CAPITAL ONE C3 New York, NY 10004 Tel: 843.640.3713 Tel: 212.803.6597 [email protected] [email protected] capital.one/financialinstitutions CUSTOMER SERVICE SOURCEMEDIA �� One State Street Plaza New York, NY 10004 DELOITTE C4 Tel: 800.221.1809 Fax: 212.292.5216 [email protected] www.deloittedigital.com/us/huxfinancial

Visit us at www.AmericanBanker.com/Magazine

022_ABM1219 22 11/11/2019 4:27:20 PM Marketplace Showcase Welcome to the premier monthly showcase of products, services and solutions for the Banking and Financial Industry

LEGAL – FOUNDATION NOTICES CRA INVESTMENTS

NOTICE

The annual report of THE BLUMBERG

FOUNDATION for the fiscal year ended

March 31, 2019 is available at its principal office

located at 40 Northwood Lane Stamford, CT

06903, (203)-968-6573 for inspection during

regular business hours by any citizen who

requests it within 180 days hereof. The Principal

Manager of the Foundation is Louise Albin.

NOTICE The annual return of the EDGAR M. LEVENTRITT FOUNDATION, INC. for the calendar year ended December 31, 2018 is available at its principal office located at 100 First Street, Suite 1600 SUBSERVICING San Francisco, CA 94105 (415) 764-2700 for inspection during regular business hours by any citizen who requests it within 180 days hereof. The principal Manager of the Foundation is Richard D’Agostino.

NOTICE The annual return of the NINA M. RYAN FOUNDATION, INC. for the calendar year The Name You ended December 31, 2018 is available at its principal office located at 100 First Street , Can Count On in Suite 1600 San Francisco, CA 94105 (415) 764-2700 for inspection during regular Loan Servicing business hours by any citizen who requests it within 180 days hereof. The principal Manager www.cenlar.com of the Foundation is Richard D’Agostino. 1-888-SUBSERVE (782-7378)

Visit us at www.AmericanBanker.com/Magazine

023_ABM1219 23 11/11/2019 4:27:21 PM BackPorch

BRENNAN HAWKEN CARLOS “They are two companies that are in different TORRES VILA stages of transforming themselves for a new “Data is the new oil — the world. This is the before and after picture.” more data you have, the more UBS banking analyst, comparing third-quarter earnings value you have.” reports from Morgan Stanley and Goldman Sachs Chairman of Spain’s BBVA Group, arguing that all types of companies, given consumer consent, should be YVES required to share their data, even MERSCH with competitors CHARLIE SCHARF “We all have to act a little bit more impatient for some of these things and demand JOHNNY more of each other.” Wells Fargo’s new CEO, urging ALLISON employees at a town hall meeting “You’ve won that deal. to help the embattled company Congratulations: You’ve improve faster just won the stupid award.” JAMES Home BancShares’ chairman, criticizing competitors for lax GORMAN terms on commercial loans “What Europe is experiencing with negative rates is obvi- ously really bad. Not just for “Libra’s banks but for the economy.” ecosystem MARK Morgan Stanley’s CEO, on concerns ZUCKERBERG is not only about the prospect of negative “I believe this is something complex, it interest rates in the United States that needs to get built, is actually but I understand we’re not cartel-like.” JAMIE DIMON the ideal messenger right European Central “God, I hope it never comes now.” Bank executive board here.” member, on Facebook’s Facebook’s CEO, defending proposed digital JPMorgan Chase’s CEO, saying he its plan for a global digital currency would never buy debt at below zero

currency before the House LP BLOOMBERG and calling negative interest rates Financial Services Committee irrational

KEVIN WEIL ANA BOTIN “This is not going to be “We have huge responsibilities as the a thing that spreads like guardians of businesses in the modern world. a social network. This is We must recognize them — and do more to going to be the work not of live them. If we don’t, business-as-usual may years but of decades.” lead us to no business at all.” Vice president of product at Banco Santander’s chairman, warning that failure to Facebook’s Calibra digital wallet act on the public’s increasing dissatisfaction with the unit, speaking about Libra at a current model of capitalism could lead to its demise

tech conference LP BLOOMBERG

24 American Banker December 2019

024_ABM1219 24 11/7/2019 11:45:59 AM Where experience and new ideas intersect If you’re in need of a fresh source of capital and insights, look no further than a top 10 U.S. commercial bank¹.

Get a new take on consumer lender finance from Capital One® Financial Institutions Group. With our specialized expertise in serving consumer finance companies, we’ll help you make the right moves at just the right time.

Start down the road to better financing today.

capital.one/financialinstitutions

Capital One Financial Institutions Group:

Dave Kucera Judd Deppisch, CFA Senior Managing Director Managing Director 312-739-6224 312-442-3863 [email protected] [email protected]

1Top U.S. Domiciled Bank Commercial Banking outstandings; COF externally reported numbers; Source: Individual bank Q2 2018 Earnings Releases. Products and services offered by Capital One, N.A., Member FDIC. © 2019 Capital One.

003_ABM1219 3 11/11/2019 4:42:19 PM Drive hyper-growth by elevating the human experience at every interaction.

www.deloittedigital.com/us/huxﬁnancial

004_ABM1219 4 11/11/2019 4:42:19 PM