Banking Mid Atlantic (July/Aug) 2019

AUGUST 2019

OUT WITH THE OLD

80-Year-Old Name Dropped For Commerical Focus

DISCRIMINATION Are You Guilty Of It Without Even Trying?

REPUBLIC WANTS TO BE BEST IN SHOW SAYS BIG APPLE DEPOSITORS HOWLING FOR CUSTOMER SERVICE

A PUBLICATI O N O F A M E R I C AN B U S IN ES S M ED IA

Senior Management & Leadership October 16, 2019 RESORTS CASINO HOTEL | ATLANTIC CITY, NJ

www.bankhorizons.com Don’t miss BankHorizons Senior Management & Leadership on October 16, 2019, Atlantic City, NJ

Not for the faint of heart – this will be a sobering but motivating meeting of some of the top minds in the industry.

Mid Atlantic’s gathering of C-level banking executives looking to take their institutions to the next level. Thought leaders will be on hand presenting on topics that should be top-of-mind for key executives at financial institutions in the Mid Atlantic region, such as corporate synergy, disruption, team-building and corporate culture.

There’s nothing quite like standing face-to-face with potential new clients. At American Business Media, we are proud to be the nation’s largest producer of bank and credit union conferences, putting financial executives in direct connection with vendors and advisors who help them succeed.

To see all of our banking shows, visit bankconferences.com or call 860.719.1991.

AUGUST 2019

18 Branding

Blue Foundry Seeks Growth Through Rebranding

21 Did You See? 4 Letter From The Publisher

Merger Insights And Upcoming Horizons

5 Customer

Experience

Should It Be So Hard To Become Your Customer?

8 Bank Design

Bank Of The Future

Keep Abreast Of Banking News From Our Weekly Newsletters You May Have Missed In New Jersey, Pennsylvania And Delaware

10 Expansion

Republic Bank Sees Customer Service As Its Opportunity In Manhattan

13 Try To Keep Up

Local Banking Professionals Making Their Move Up The Corporate Ladder

16 Operations

23 Anything But Banking Alma DeMetropolis Of JPMorgan Private Bank

24 Statistics

Did You Get Recognition For Your Banks Strong Community Contributions?

26 M&A

The Ostrich Effect

The Back-End Impact Of Front-End Changes

28 Diversity

Fight Unconscious Bias

CONTENTS

STORY 10 COVER Republic Bank Heads to Manhattan

www.ambizmedia.com August 2019 | BANKING MID ATLANTIC

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L ET T E R F RO M T H E P U B LIS H E R

To Prep For The Next Step You Have To Look Over The Horizon

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he Mid Atlantic region continues to witness contraction in the number of banking companies, as institutions consolidate, merge or are acquired. Too often, it seems, the desire of remaining independent is overtaken by the need to pare costs, the crush of bigger competitors or just the promise of a nice payout.

Whether by design or necessity, sometimes a sale or merger just makes the most sense, fiscally. But whether that eventual combination succeeds needs significant advance thought. Kim Snyder is a banking industry consultant who as EVP and CFO of Valley Financial Corp. / Valley Bank in Virginia helped lead that institution to an acquisition by BNC Bancorp at a 173% premium to tangible book value. In this issue, she writes about the checklist of things that bank executives need to consider – most importantly, your current culture and product mix – to insure that things continue to work after the sale is complete.

Kim will also be one of our featured speakers at the upcoming BankHorizons conference in Atlantic City on Oct. 16. The fall edition of this popular conference focuses on lending and success strategies for senior management at banks and credit unions. It already promises to be a day full of actionable insight.

Attendees will once again have the opportunity to network with peers, discover one-of-a-kind solutions from leaders in the banking community, and learn about the latest products and services revolutionizing the industry. Our topics include a multi-banker panel on transforming the branch experience, and expert-led sessions on driving success in a challenging retail banking environment, how to hire bankers who will sell, and what if Trump negotiated your next core IT deal?

We’ve got it all developing at www.bankhorizons.com. Learn about emerging opportunities and innovative solutions for the banking industry at the region’s most comprehensive conference about banking best practices. At BankHorizons, you will encounter an action-packed day complete with thought-provoking educational sessions, interactive panels, leading companies, networking, and so much more.

We look forward to seeing you there.

STAFF CEO, PUBLISHER & EDITOR Vincent M. Valvo ASSOCIATE PUBLISHER Barb Dimauro MANAGING EDITOR Keith Griffin OPERATIONS MANAGER Kurt Schenher ONLINE CONTENT DIRECTOR Navindra Persaud GRAPHIC DESIGN MANAGER Stacy Murray GRAPHIC DESIGNER Scott Ellison Submit your news to

editorial@ambizmedia.com If you would like additional copies of Banking Mid Atlantic Call (860) 719-1991 or email kschenher@ambizmedia.com Cover photo: Submitted

www.ambizmedia.com © 2019 American Business Media LLC All rights reserved.

Banking Mid Atlantic magazine is a trademark of American Business Media LLC. No part of this publication may be reproduced in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without written permission from the publisher. Advertising, editorial and production inquiries should be directed to: American Business Media LLC 345 North Main St., Suite 313

VINC E N T M. VALVO

CEO, Publisher & Editor

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BANKING MID ATLANTIC | August 2019

West Hartford, CT 06117

CUSTOM E R E X P ER IENCE

Should It Be So Hard To Become Your Customer? !!

H H H A

By MIKE KIRKPATRICK, Special to Banking Mid Atlantic

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pening a new bank account can be a rite of passage for many young consumers who join the working world. Some already have accounts opened by their parents but with an independent spirit and newfound freedom, most decide to open an account on their own for direct deposit of their payroll check and access to the banking system for bill pay and other conveniences.

This access isn’t always cheap, some of you are charging 12 bucks or more a month for this access.

That’s on par with HBO GO or Amazon Prime - subscriptions that deliver much joy for those bucks.

And while there’s no way you’ll ever deliver the same joy as Hulu, Netflix or other fun stuff for that money shouldn’t it be at least very easy to sign up?

I surveyed a handful of bank account sign-ups and found some really common pitfalls with simple fixes that would make capturing these consumers far easier and start relationships in a much better way.

By the way, it’s estimated that 40 percent of consumers abandon this process once they start. We can do better than that with simple UX and UI best practice.

For this exercise, I surveyed seven banks, four large national brands, one digital only player, one credit union and one local regional player based in Massachusetts. I found some trends, patterns and have some August 2019 | BANKING MID ATLANTIC

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Be wise about the questions you ask and challenge your banking colleagues in the name of customer experience. tips all for experience improvements that can be made today without an overhaul to the IT tangle. A lot of them come down to best practices of humancentered design - that is building the product (the online application) around how the user thinks, feels and acts and their wants and needs — not how the financial products or the bank works.

Product-centric or feature-centric design is a common folly and one I saw in full display. This is where experiences cater to the way the organization works, or because of a legacy process or technology. Risk and compliance can also be rationale for bad user experience.

You don’t need to drive risk to zero, it’s impossible to do that - right? Challenge that thinking and take the right balanced approach to achieve compliance without torturing new customers.

Here are some of the findings and food for thought in reviewing a handful of account-opening experiences.

WATCH THE LANGUAGE

In many cases the language used is “banky,” and not welcoming. Product names are often the worst offenders and not at all consumer-centric. Here’s a short roster of products I had to choose among: • Total Checking • One Deposit Checking • Platinum Checking • Platinum Plus Checking • Premier Plus Checking • Gold Star Checking • Star Checking • Free Checking (that one sounds good actually…)

With product names, banking is taking a page from health insurance, which has notoriously opaque names for healthcare plans. Health insurance isn’t often a source for experience-based inspiration and shouldn’t be here either. Here at Mad*Pow, our research has shown this opacity reinforces the distance between you and your customers which impacts loyalty. When you speak a different language, it does not foster trust (which starts with mutual understanding).

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BANKING MID ATLANTIC | August 2019

There was one exception with product language specifically, the digitalonly player asked how I plan to use my account. Online Savings? Interest Checking? It’s not perfect but a much more, “me-centric” way of asking!

Thank you. I know products need names but why not focus on my needs and you figure out whatever product that translates to? Remember to be customercentric, not product-centric.

JUST BECAUSE YOU WANT TO KNOW, DOESN’T MEAN YOU SHOULD ASK

Some of you ask me for employer information (skip tracing?) some didn’t. How do I plan to use the account? One bank asked me four questions about how I plan to use the account…

• What’s the average monthly value of your total deposit transactions?

• What’s the expected value of your total cash deposits?

• What’s the average monthly value of your total withdrawal transactions?

• What’s the average monthly value of your total cash withdrawals?

Come on. It is like I want to date your daughter and you’re asking me how many kids we’re going to have, where we plan to live and where we’ll send the kids to college. It’s a turn off and makes me want to run away. If you’re using this information to tailor the experience or product options I’ll see later, that’s great.

Honestly. Just don’t put this in front of the already arduous sign-up process.

You don’t need to know everything now.

Let me sign up and get this information later, maybe a little at a time if I end up calling or visiting a branch.

There was also this: You: “What is the purpose of the entire client relationship?”

Me: Puzzled. Thinking and unsure how to answer, “I need a checking account.” Open dropdown…Choose “Basic Banking” You: “What products are you anticipating using?”

Me: Thinking, “??? I don’t know but

can we just open the hypothetical account already?”

This felt a little like I was at the border being asked for my papers. Please resist the urge to gather copious data that serves you but adds pain to an already painful exercise and risks feeling a little cold and unfriendly. I’ll be a great customer if you respect my experience.

Let’s talk about this stuff later.

Be wise about the questions you ask and challenge your banking colleagues in the name of customer experience.

Every question you add decreases the chances of completion. Questions need to prove themselves in, not be proven out of the experience flow - Ask “why” not “why not”.

ANTICIPATE THE ISSUES AND DESIGN FOR THEM

I really tried to open these accounts which means I went all the way through the process including providing funding.

In every case I was denied, which I thought was odd. I was looking forward to digging deeper by using each of the respective bank apps. Bummer. Did I get my driver’s license number wrong?

I screw that up sometimes.

Then I went to the pure digital bank and at the beginning of the process was asked, “Do you have a freeze on your credit?” “Ahh… yes. I do.”, I thought. I was able to first suspend the freeze, then work the application process to completion.

Anticipatory design has a lot of facets and at its finest can deliver real “delight moments” (as agency people say) through simple utility. As your “signer uppers” move from one section to another, try to anticipate what they may be asking themselves or an answer to a question based on something prior.

For example, on one bank’s application I chose to fund by credit card. I plugged in my number, no problem.

Next question I was asked was “Card Network.” This broke like three rules at once. “What’s this want?” I thought.

I opened the dropdown menu to see “Mastercard, Visa, Amex”. “Wait, can’t

This is the experience economy, so much of that value can come in the form of a great customer experience ...

they derive this from the number I provided?” (yes) The trifecta here was the use of dropdown menus which hid the potential answers from me.

Other User Experience and User Interface madness you can learn from…

• Why don’t you all of you use the number pad for numerical data collection! Not helpful to have QWERTY for my date of birth or SSN is it? So easy.

• Dropdown menus or dropdowns are almost always a bad UI choice especially on mobile. Why? All the options are hidden. Many of you make them even worse by having the default option as “choose one” providing no sense for the family of answers contained within. Try to avoid dropdowns. If you must use them, try to make it clear what’s in them so I can mentally have the answer ready for scanning when I open up and see a long list of things to choose from.

• One bank listed Service Fees: “$25 or $0”- this is presumably the result of optional minimum balance

requirements but it’s an odd way to display this to a consumer who’s wondering, “How much are fees?”

Should be more intuitive.

• I was curious about my account’s interest rate. It was listed on one bank as “Earns Interest (see rates).”

The “see rates” link sent me to a page that included general rates for every product offered by the bank. Like a brochure on interest. Why not just tell me what I earn!? I give up. Be easier, please.

Readers here know that opening a new checking account isn’t the path to sudden profitability for the bank. On average, most banks lose money on a single checking account relationship.

However, the hope here is that this will begin a relationship that goes multiproduct as consumers needs change and grow over time.

This sets the stage for the relationship you hope to deepen.

Banks would love to deliver

checking, savings, a loan for your new car, your mortgage. The challenge in the today’s digital age is that these products have largely become commoditized, with little differentiation. Therefore, these products need to be packaged with other items of value, and many banks are trying to figure that out.

This is the experience economy, so much of that value can come in the form of a great customer experience - one that is highly personalized, meets me where I am and provides me with the advice I need not sales driven BS. If you’re committed to this ethos, start with the account opening and go from there.

Quick wins, folks. Experience matter.

Michael S. Kirkpatrick is senior vice president, client experience & strategy and leads the financial services practices at Mad*Pow, an experience design agency.

August 2019 | BANKING MID ATLANTIC

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B A N K D ES IG N

Bank Of The Future

NEW BANKS FEATURE MORE, IN SMALLER PACKAGES (AND POP UPS TOO)

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By R. MICHAEL GOMAN, Special to Banking Mid Atlantic

oday’s technology means most customers can pay their monthly bills in about five minutes without ever picking up a pen to sign their name.

No stamps or paper checks required, and no waiting for “regular banking hours.” With a smartphone, laptop or home computer, moving cash between accounts now takes only a few mouse clicks. Direct deposit has largely eliminated printed paychecks. Even store refunds using hard cash is rare.

Most customers don’t visit a bank branch with any frequency. And when they do -- to cash a check or withdraw a few bucks -- ATMs take care of basic needs.

Even complex credit and loan approvals are becoming almost instantaneous.

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BANKING MID ATLANTIC | August 2019

With all this transformative change, what will tomorrow’s bank look like, and what will we do there?

Are traditional, ornate bank branches today’s granite and marble equivalents of the buggy whip -- once very useful, but now history?

Not exactly. Banks will indeed look and feel different, but they will still serve important functions, and offer enhanced personal services. Rather than a place to conduct transactions, bank branches will be places we go for personal advice and financial education.

Undeniably, digital banking is taking over. Brick-andmortar bank locations remain a critical sales channel, but smaller physical layouts and technology are transforming how customers will interact with bank employees.

Traditional bank teller positions are disappearing, replaced by knowledgeable personnel who offer advice and can sell

a full array of products and services.

Meanwhile, the emergence of Big Data analytics – which increasingly track and characterize individual and collective consumer buying patterns and preferences – will enable a more personalized customer experience.

Greater convenience will be evident. Hours of operation will move toward 24-7. Interactive Teller Machines (ITMs) with full-service videoconference access will flourish, while payment options will continue to expand.

Let’s look at how banks are already reinventing their local branches.

One of the more intriguing innovations are so-called “popup” bank branches which can cost 10 percent of a typical branch!

These self-contained spaces may be designed to fit within converted recreational vehicles or housed inside 20’ by 8’ steel containers (the kind typically seen on a truck bed or rail car). These portable offices feature on-site bank employees who use tablets to open new accounts, initiate personal loans, offer products and make service referrals.

With relative ease, a “pop up” branch can be located where it’s needed. For example, a branch equipped with its own electric generator could serve an area suffering from a natural disaster.

Such a branch can also test early foot traffic in a prospective location, allowing the bank to gain local customer insights and better “scale” a brick-andmortar building. A temporary branch could also be a vendor at a country fair, sporting or other public events where the bank wants to enhance its presence and build brand awareness.

Also, the traditional row of teller windows is quickly vanishing, replaced by kiosks or island service centers, staffed by professionals with tech at their fingertips. These “universal bankers” are focused on financial

services and can help with all manner of banking business.

Tellerless branches known as “virtual centers” or “smart branches” will employ no people on site.

Instead, videoconference capabilities and handsets will allow customers to obtain personal, confidential assistance with transactions or consult with mortgage loan officers or investment specialists in remote locations.

Banks are also exploring contemporary café branches, where customers can access free Wi-Fi or web access, enjoy coffee, recharge their cell phones, withdraw money from an ATM, or talk to a banker for more complex assistance. Branches are being co-located with other retail outlets – such as pharmacies and big box retailers – to reduce costs and enhance customer access. Many banks

have gone a step further, offering their space for after-hours community activities such as investment classes or social gatherings to help build their community brands.

As technology and consumer preferences continue to evolve, so will banks, from places of basic transactions to financial advice and service centers. These are exciting times for banks that choose to embrace change, innovate, and please tech-savvy customers who will seek banks centered around custom services and conveniences that fit their busy lifestyles.

R. Michael Goman is president of Accubranch LLC, based in East Hartford, Conn., which offers trusted advice to community banks and credit unions regarding branch locations.

The traditional row of teller windows is quickly vanishing, replaced by kiosks or island service centers, staffed by professionals with tech at their fingertips.

August 2019 | BANKING MID ATLANTIC

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E X PA NS IO N

Republic Bank Sees Customer Service As Its Opportunity In Manhattan

By DAN CALABRESE, Special to Banking Mid Atlantic

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BANKING MID ATLANTIC | August 2019

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f a bank with growth ambitions is looking to enter a market with a need, Manhattan might not seem at first glance like the place to go. It is certainly not lacking for banks. But Republic Bank, based in the Philadelphia/New Jersey market, sees Manhattan as more than just the sum of its banks. Before making the decision to open its first Manhattan outpost, Republic looked at the level of customer service and assessed the likely consumer satisfaction level.

The verdict? Manhattan may have a lot of banks, but it doesn’t have a lot of banks that excel at customer service. And to Republic, whose “Power of Red” tagline is heavily themed on customer service, that meant opportunity.

“We have people waiting in lines to come in,” claimed Republic Bank CEO Harry Madonna. “People on social media let other people know we’re open, and we see that happening all the time. It doesn’t require the kind of mass advertising you see from big banks.”

Madonna said Republic sees itself in many ways as a successor to Commerce Bank, which was sold to TD Bank more than a decade ago. There are plenty of reasons for that association, and the biggest is the fact that former Commerce Bank CEO Vernon Hill is a major investor and chairman of Republic’s board.

And Republic’s first Manhattan branch is in the same location where Commerce once operated, which is one of the reasons Madonna sees a natural constituency in the form of former Commerce customers.

“If you think about it, we’re following in the old Commerce footsteps,” Madonna said.

“We’ve got a lot of customers who used to be Commerce customers saying, ‘When are you coming?’ We thought we’d make the leap into New York and we could fill in North Jersey and Long Island as part of the plan.”

It starts in Manhattan, though, where Madonna says bigger banks have lost their appreciation for personal service amidst the rise of digital apps and so forth. He noted that TD used to have coin counters available for customers in their lobby, and claims now when you walk in they are covered.

“New York has gotten kind of fat on their old ways,” Madonna said. “They’ve slipped back to high fees, less customer service, cutting costs. If you drive around, you see offices close. I laugh.”

TD Bank asserts its customer service levels are exemplary. “TD Bank is renowned for our outstanding

customer service and retail products that meet the evolving needs and preferences of our customers in New York City and across our footprint, which is why Kiplinger recently ranked TD as the Best National Bank in the U.S. for the third year in a row and Money picked TD as the Best Bank for Seniors for the second consecutive year. TD has a strong, deeply rooted connection with the diverse communities that we serve across New York City, where we’re committed to delivering unexpectedly human service to thousands of loyal retail customers at our 141 TD Bank stores, virtually all of which are open seven days a week for everyone’s convenience,” said Matthew J. Doherty, vice president, corporate communications manager| corporate and public affairs, at TD Bank.

Bruce Paul, CEO of Customer Experience Solutions LLC, said his group’s research backs up Madonna’s sense of the market and issues with customer satisfaction.

Citing the New York Banking Benchmarks, Paul said Republic should be able to capitalize on clients’ concerns if it excels in customer service as Madonna vows it will.

“We’ve interviewed hundreds of thousands of people about their banking experiences,” Paul said. “About 33 percent of them in Manhattan are unhappy with their bank. So, there’s a lot of opportunity.”

Paul said his team’s calculations put the number of Manhattan bank customers ready to switch to a bank with better customer service at about 247,000.

Of course, some existing Manhattan banks are better than others at customer service.

“The percentage of vulnerable customers varies widely by institution,” Paul said. “There are some that have a relatively high percentage like Santander, HSBC and NY Commercial Bank.

On the other hand, there are others that have much lower levels of vulnerability like Chase, Amalgamated and TD. New entrants like Republic could gain decent market share if they target vulnerable customers with the right marketing message.”

Republic currently has about $3 billion in assets, Madonna said. The bank is not publicly targeting a specific growth figure going forward but is seeking to open about seven new branches per year – although that requires exploration of as many as 15 per year because not all of them will come to fruition.

“A lot depends on what happens in New York,” Madonna said. “If New York takes off the way we think it will, with the size of deposit growth we see, in two

An estimated

247,000

customers are ready to switch to a bank with better customer service.

August 2019 | BANKING MID ATLANTIC

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“Manhattan offers growth potential far beyond what Republic has seen in the suburbs of Philadelphia.”

Peter Ostrowski Ostrowski & Company

or three years we could be doing more than seven or eight per year.”

Peter Ostrowski, managing director of Ostrowski & Company, said Manhattan offers growth potential far beyond what Republic has seen in the suburbs of Philadelphia.

“Manhattan’s a totally different place in terms of what you can generate,” Ostrowski said. “You see branches on the street corner and they’re at $300-to-$400 million. You can’t generate that in the suburbs. The amount of business you can do in a small area is pretty significant given how packed Manhattan is.”

A decade after Commerce Bank’s sale to TD, however, Ostrowski doesn’t think all its old former depositors and clients are automatically coming “home” to Republic – although the opportunity is there.

“They’ve got to be competitive in terms of their products and services,” Ostrowski said. “If customers are dissatisfied, they’ve got to bring them back. Nobody’s going to just come running to them.”

If Republic is going to pull in those customers, Madonna said it won’t be through the kinds of huge traditional media buys that are often associated with the bigger banks. He believes more personal methods like word of mouth and social media are going to get the word out.

And Madonna recognizes the potential for Manhattan to drive some serious growth goals for the bank.

“New York stores should be growing at a rate of $75

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BANKING MID ATLANTIC | August 2019

million a year,” Madonna said. “If that happens, your asset size is going to dramatically increase. We’re going to continue to open stores in the Philadelphia area, but the growth rate there can’t match the growth rate in New York.”

While Madonna did not rule out the possibility of acquisition being part of Republic’s growth strategy, he did not see it as likely to be a major focus.

“It’s possible you could do an acquisition, but the problem is that our growth depends on having branches that are similar and uniform, and can offer the same kinds of service,” Madonna said. “When you acquire another bank, you get something else. Organic growth, I think, is the major direction of our future, abut in this world you never know.”

Republic does not plan to add any new lines of service as it enters Manhattan, as the bank believes it already offers a full line. Rather, it’s differentiation strategy is all about the way customers experience dealing with the bank.

“You try and bury the stupid rules,” Madonna said. “I get this question all the time: ‘Why can’t I do this?’ And you look at it and you say you know what? There’s no reason you can’t do it.”

That philosophy, he’s convinced, will get people to move: “They make a choice. They move with their feet.”

MID TIC ATLAN

TRY TO KEEP UP LOCAL PROFESSIONALS MAKING THEIR MARK IN MID ATLANTIC BANKING

M&T Bank Announces Regional Leadership Promotions

M&T Bank has announced a series of leadership promotions to manage operations in New Jersey and the greater Philadelphia region.

The following bank executives have been assigned broader responsibilities: Ira Brown has been promoted to area executive. He previously served as regional president for the bank’s Philadelphia and southern New Jersey region, and in his new role will add central and northern New Jersey to his Ira Brown Bernard T. Shields responsibility.

Bernard T. Shields has been promoted to regional president for the Philadelphia and southern New Jersey region, reporting to Brown. He previously served as the group vice president and group manager for the bank’s commercial real estate group.

“I am proud to continue to represent M&T Bank in the greater Philadelphia region, and expand my role in the Garden State,” said Brown, “I have every confidence that Bernie will excel in his new role overseeing M&T’s complete community banking capabilities in a region where he has fostered deep, meaningful relationships. I look forward to working with him to bring the full depth of our community-focused banking model to the broader Philadelphia and New Jersey area. “ Brown joined M&T Bank in 1999. In his new role, he will oversee operations in the bank’s Philadelphia and New Jersey regions. He is actively involved in the community and currently serves on the boards of the Central Philadelphia Development Corporation and Cooper’s Ferry Partnership. He is also a member of The CEO Alliance.

Shields began his career at M&T Bank in 2002. He will continue reporting to Brown, while overseeing the bank’s Philadelphia and southern New Jersey region. He earned his Bachelor’s degree at Saint Joseph’s University and holds a Juris Doctor degree from Temple University. He is involved in the board of Mission Kids Child Advocacy Center. In addition, he formerly served on the boards of the Philadelphia Chapter of Risk Management Association, Business Leaders Organized for Catholic Schools (BLOCS), and Brent Celek Take Flight Foundation.

Barclays Announces Rodrigues Barclays Bank Delaware CEO

Barclays announced the appointment of Barry Rodrigues as CEO of Barclays Bank Delaware and head of Barclays US Consumer Bank. This is in addition to his current role as CEO of Barclays Cards & Payments.

Rodrigues has more than 25 years of international banking and payments experience gained in New York, London, Singapore and Hong Kong. He joined Barclays in November 2017 as CEO of Cards & Payments. Before Barclays, Barry Rodrigues Rodrigues spent six years at Citi as head of digital payments for the global consumer bank. Prior to that, he was at American Express for 25 years in a number of leadership roles, culminating in him becoming president of the Global Network business.

Rodrigues will split his time between New York, Delaware and London

Cross River Names Ballenger CFO

Cross River Bank, a Fort Lee, N.J., provider of banking services for technology companies, has appointed Melissa Ballenger as its executive vice president and chief financial officer.

Ballenger joins Cross River from State Street Corporation, where she served as executive vice president, chief financial officer of Europe, Middle East and Africa (EMEA).

Over the course of her more than 25-year career, Ballenger has served Melissa Ballenger in executive leadership roles for companies across the financial services industry, including payments, consumer and commercial banking, mortgages, and investment servicing and management.

As Cross River’s CFO, Ballenger will be responsible for overseeing the company’s strategic and financial planning, balance sheet structuring, accounting functions, risk management practices, as well as its funding strategies – helping to drive Cross River’s continued profitability and next stage of growth. She will report directly to Gilles Gade, CEO of Cross River.

Before State Street, Ballenger served as executive vice president and chief financial officer for Santander Bank, N.A., before becoming EVP, chief business control officer for Santander US. Previously, she held senior leadership August 2019 | BANKING MID ATLANTIC

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positions in other public companies, including EVP, deputy chief financial officer for TD Bank, N.A.; controller and principal accounting officer at MasterCard Worldwide and at Washington Mutual Bank; and senior financial positions at Freddie Mac.

Prior to joining PNC in 2009, she was the managing director of Wachovia Wealth Management. Bowden began her career as a teacher for seven years in Wyckoff and authored two children’s math books.

Valley National Bancorp Appoints Hagedorn As CFO

The Bancorp, Inc., based in Wilmington, Del., has promoted Gregor Garry, the current chief risk officer and deputy chief operating officer of the company, to the role of executive vice president, chief operating officer. He succeeds Hugh McFadden.

In this role, Garry will lead several key divisions of the company, including operations, financial crimes risk management, enterprise risk management and consumer compliance.

Gregor Garry He will also continue to serve as The Bancorp’s CRO until a successor is named.

McFadden will transition to an advisory role as the company’s senior executive advisor in connection with various operational functions at The Bancorp.

Garry joined The Bancorp in October 2014 as vice president, internal audit where he became the primary architect and implementation manager of The Bancorp’s risk-based internal audit function. Throughout his tenure he was promoted to different positions including chief audit executive responsible for the oversight of The Bancorp’s entire internal audit department, and Managing Director, CRO where he had oversight of a wide range of internal control functions related to enterprise-wide risk management, third-party risk management, and cybersecurity.

Greg also assumed responsibility for managing The Bancorp’s regulatory affairs and overseeing the remediation of regulatory issues. Prior to joining The Bancorp, he served as an internal audit manager at The First National Bank in Sioux Falls, Sioux Falls, South Dakota.

Valley National Bancorp, the holding company for Valley National Bank, announced the appointment of Michael D. Hagedorn to senior executive vice president, chief financial officer effective August 10, 2019. Hagedorn is succeeding former CFO Alan Eskow, who as previously announced will take on a senior advisory role at the Bank.

Most recently, Hagedorn served as president and CEO of UMB Bank and vice chairman of UMB Financial Michael D. Hagedorn Corporation in Kansas City, Missouri for over four years. Previously, he served as CFO for UMB Financial Corporation since 2005. Prior to UMB Financial, Hagedorn held various positions of increasing responsibility with Norwest Bank and Wells Fargo.

As Valley’s CFO reporting to Ira Robbins, president and CEO, Hagedorn will lead all key finance and capital market strategies while working closely with the board and executive leadership team to define and execute all corporate plans and initiatives. He will oversee all aspects of financial reporting, accounting, taxation, corporate treasury, balance sheet management, and investor relations.

Hagedorn earned a Bachelor of Business Administration in Finance with a minor in Accounting from Iowa State University. He has been an active supporter of the local community, serving on the boards of the Kansas City Chamber of Commerce, Kansas City Streetcar Authority, Kansas City Downtown Council, University of Kansas School of business and several other philanthropic organizations. Hagedorn is an accomplished professional who has been recognized by the Kansas City Business Journal as a CFO of the Year Honoree in 2009, 2010 and 2012 and by The Des Moines Business Record with their “40 Executives Under 40” honor in 2004.

Bowden Elected Chair Of NJ Chamber

Linda Bowden, New Jersey Regional President at PNC Bank, has been elected chairwoman of the New Jersey Chamber of Commerce Board of Directors.

Bowden will serve a two-year term.

Bowden has been serving as the N.J. Chamber’s first vice chair for the past two years. She has been a member of the chamber’s board of directors since 2009 and has served on the executive committee since 2013.

Bowden succeeds Robert Doherty, Linda Bowden state president for New Jersey at Bank of America.

Bowden has been with PNC for 10 years, with a professional career that includes responsibilities as a portfolio manager, trust and investment officer and as a manager overseeing private banking officers. Bowden has been named among the “25 Women to Watch” by U.S. Banker magazine and was recognized as one of the “Best 50 Women in Business” and “Power 100” by NJBIZ newspaper.

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BANKING MID ATLANTIC | August 2019

Bancorp Names Garry New COO

Executive Selected To Lead Bank’s Marketing Division

S&T Bank, a full-service financial institution with assets of $7.3 billion, and current operations in five markets including Western Pennsylvania, Central Pennsylvania, Northeast Ohio, Central Ohio, and Upstate New York, has welcomed Dana Wysinger as chief marketing officer (CMO).

“S&T Bank is charting a course for growth by making strategic investments in our talent and technology to provide best in class solutions and services Dana Wysinger to our communities and businesses that we serve. We are excited to welcome Dana to our team and believe her diverse experience in marketing, data and analytics, and digital technology will play an integral role in transforming our business,” said Todd D. Brice, CEO of S&T Bank.

Prior to joining S&T Bank, Wysinger held several senior executive positions at Fortune 100 & 500 companies including Target Financial Services, Wells Fargo, and SunTrust Bank.

She directed strategic planning, marketing, and product management and development. Her responsibilities included driving consumer and business banking deposits, credit and lending acquisition, and retention efforts. She served in

other marketing leadership roles with treasury and payments solutions, small business, and private wealth management.

“Dana is a customer-centric focused marketer who leverages data and client insights delivering an unparalleled client experience at every touch point of the customer lifecycle,” said Becky Stapleton, chief banking officer of S&T Bank. In her new role as chief marketing officer, Dana will be spearheading all marketing, brand and demand generation, digital strategy, and product management. Dana will work closely alongside S&T Bank’s market presidents and lines of business to develop and execute market-based strategies to enhance the customer experience across all distribution channel platforms.

Wysinger graduated with a bachelor’s degree in mass communication from the University of California, Berkeley and received executive education in advanced strategies in digital marketing and analytics from Wharton Business School and organizational leadership from Harvard Business School. Outside of work, she actively participates in numerous professional and charitable organizations including Junior Achievement, United Way, and United States Chamber of Commerce.

Pennsylvania Bankers Name New Board of Directors

Category D ($2.5B+ in deposits): Ronald J. Seiffert – president and CEO; Northwest Bank; Warren, Pa. PA Bankers Group Representatives: Group 1: Rebeccca A. Stapleton − senior executive vice president, Chief Banking Officer; S&T Bank; Indiana, Pa. Group 2: Jeane M. Vidoni − president and CEO; Penn Community Bank; Perkasie, Pa. Group 3: Daniel J. Santaniello – director, president and CEO; Fidelity Deposit and Discount Bank; Dunmore, Pa. Group 4: Robert J. Glunk – chairman, president and CEO; The Muncy Bank and Trust Company; Muncy, Pa. Group 5: Angie Sargent – senior executive vice president, chief information officer; Fulton Financial Corporation; Lancaster, Pa. Group 6: Carol A. Myers, C.P.A. − executive vice president, chief financial officer and senior finance group head; 1ST SUMMIT BANK; Johnstown, Pa. At-Large Representatives: Philip H. Johnson − regional president; M&T Bank; Williamsport, Pa. Francis J. Leto – president and CEO; The Bryn Mawr Trust Company; Bryn Mawr, Pa. Mark A. Ritter – executive vice president, wealth management; The Northumberland National Bank; Northumberland, Pa. Dale Westwood − Executive Vice President, Chief Retail Officer; QNB Bank; Quakertown, Pa. Non-Voting members: J. Duncan Campbell III − president and CEO and treasurer; Pennsylvania Bankers Association; Harrisburg, Pa. Steven G. Fisher – senior executive vice president, chief revenue officer; Northwest Bank; Warren, Pa. The 2019-20 terms run from July 1, 2019, to June 30, 2020.

The Pennsylvania Bankers Association announced its newly elected 2019-20 Board of Directors.

Recently confirmed at the association’s annual convention, the 23-member board will oversee the association’s strategic direction, policies, professional development offerings, member services and advocacy efforts.

The following individuals will serve as officers on the board: Chair: T. Michael Price − president and CEO; First Commonwealth Financial Corporation; Indiana, Pa. First Vice Chair: J. Bradley Scovill – president and CEO; Citizens & Northern Bank; Wellsboro, Pa. Second Vice Chair: Wesley M. Weymers – president and CEO; The Gratz Bank; Gratz, Pa. Immediate Past Chair: James V. Dionise − president and CEO; Mars Bank; Mars, Pa. Additional members of the Board of Directors include: Policy Committee Chairs: Professional Development: Gregory T. Hayes − president and CEO; Kish Bank; Belleville, Pa. Government Relations: Blair T. Rush – president and chief operating officer; Covenant Bank; Doylestown, Pa. Member Relations: David R. Hunsicker – chairman, president and CEO; New Tripoli Bank; New Tripoli, Pa. Deposit Category Representatives: Category A ($0-$300M in deposits): James Wang − president and CEO; Asian Bank; Philadelphia, Pa. Category B ($301-$750M in deposits): Gary C. Beilman− president and CEO; The Dime Bank; Honesdale, Pa. Category C ($750M-$2.5B in deposits): Randall E. Black – president and Register Today: CEO; First Citizens Community Bank; Mansfield, Pa. aba.com/CS14

Get the Full Picture

ABA Compliance Schools Fall 2019 Session October 5 –11, 2019 Atlanta, GA ABA Compliance Schools cover the basic regulations in play today, as well as how to strategize where they may go tomorrow. Students at each level learn alongside peers and industry experts to bring the challenges of regulatory change into focus for their institution.

August 2019 | BANKING MID ATLANTIC

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OP E RAT IO NS

The Back-End Impact Of Front-End Changes

By DAVID WELSH, Special to Banking Mid Atlantic

T

he way we bank today is different than it was even five years ago. Core functions that were once key components of bank services are now happening outside of the four walls of your branch, and often, online. Today, branch designs David Welsh incorporate more meeting and consulting space and utilize technology to streamline and improve customer service and, as a result, banks are able to do more in less square footage.

While banks across the nation have seen these trends play out, and many are now operating out of new, streamlined, technologically advanced branches – the back-end impacts of these front-end changes can’t be ignored.

Regardless of whether your customer is doing business with your bank through an app, a phone call or an Interactive Teller Machine (ITM), it still requires a highly trained workforce. But where do you place that highly trained workforce? The answer is simple – an operations center.

Centralizing back-office functions like data processing, information systems, automated tellers, card processors, and human resource functions in an operations center creates efficiencies – and drives effectiveness. When operations are split, and you have some back-office functions at one branch, and some at another, your employees will likely be disconnected from the team members that matter most, resulting in more time spent on even the simplest of tasks.

By bringing these workers together under one roof into a clean, efficient, high-tech office space, banks will be able to more efficiently handle day-today business operations. ITM tellers will be able to handle more clients, even beyond the common 9-5 branch hours, customer service will function as one centralized team, better able to address customer needs, and bank leadership will be a step – instead of a Skype – away.

There are also a couple of important benefits of operations centers that are often overlooked.

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BANKING MID ATLANTIC | August 2019

One such benefit: operations centers can create the right home for your servers. Often, servers are crammed into spaces that weren’t designed for them, threatening security and the functionality of the equipment. A server room can be a key component of an operations center, and can be specifically designed to serve that purpose, enhancing security, improving performance and increasing longevity of equipment.

Additionally – and very importantly - an operations center is a great recruiting tool. Workers today want a modern, clean, updated workspace with options like outdoor seating, places to eat lunch, and multifunctional meeting space. Moreover, as branches invest in new technology and services, significant training is necessary. An operations center can be a great way to attract new talent, and a great place to train that new talent. Some banks even opt to have mock bank lobbies constructed in their operations centers to provide trainees as close to a real-life experience as possible.

An operations center is an investment in your future. Not only will it enable peak performance of your current operations, it will enable you to plan for future growth. It will provide your bank with the tools to attract and retain top-notch talent that will be prepared to offer your customers the highest level of service.

WHEN TO CONSIDER A NEW OPERATIONS CENTER NEW BRANCH(ES)

Company growth is the number one reason to invest in an operations center. A new branch, or branches, require new employees to train, additional administrative, HR and support functions, and an increase in your customer base that will require key services. These functions are most efficiently and effectively executed under one roof at a centralized operations center.

ACQUISITIONS / MERGERS

Acquisitions are becoming increasingly common in the banking industry. When an acquisition occurs, it is a prime time to invest in an operations center to bring

key sta from the formerly two entities together as one. It ensures consistency in service and provides an opportunity for team building, training and information sharing. In situations where one or both entities already had an operations center, the question is which operations center to maintain.

The right location will have room for growth – whether it’s acreage to accommodate building additions or space for additional parking. Regardless of which operations center is kept, it will likely need to be updated and renovated to best fit the business plan of the new, larger, bank. Which operations center is the best fit to invest in is also a key consideration in the case of an equal merger – but likely with added intricacies of “who is in charge” and “who gets to make the decision?”

TECHNOLOGY OVERHAUL

As your bank services grow and evolve, it’s likely you’ve integrated new technological solutions that require a different kind of service and staffing.

Technology like ITMs require someone on the other end. That someone is going to be most efficient at an operations center where they can serve customers at numerous different branches alongside colleagues doing the same work. In fact, in most cases, when housed at a centralized operations center, one employee can service up to three ITM machines at a time.

David Welsh is vice president of business development for La Macchia Group in Oakmont, Pennsylvania.

August 2019 | BANKING MID ATLANTIC

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B RA N D ING

Bank Sheds Old Name After 80 Years

BLUE FOUNDRY SEEKS GROWTH THROUGH REBRANDING

W

By DREW DIXON, Special to Banking Mid Atlantic

hile Blue Foundry Bank is the name change for a financial institution that was known as Boiling Springs Savings Bank for 80 years, the transition has been no small task for those leaving behind the northern New Jersey moniker.

It’s a move driven to position the bank towards a greater mix of commercial activity.

Glen Rock Branch exterior sign

“It’s a process that’s been going on for about two years,” said James D. Nesci, president and CEO of Blue Foundry Bank, which formally announced the new name July 1.

Blue Foundry Bank will continue to offer its traditional services as a retail institution focused on multi-family James D. Nesci, president and CEO housing lending and Blue Foundry Bank construction business.

But Nesci said the new name is designed to strike a connection for additional services.

“We want to do more commercial business. We want to make sure that the name would resonate with the individual consumer as well as the business customer. Our focus will take us into small business and medium sized business,” Nesci said.

‘MOVERS AND SHAKERS’

While the new name seems to connect with blue collar customers, Blue Foundry Bank is also targeting the “movers and shakers” in northern New Jersey. Nesci explained the mix of customers they’re seeking.

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“People that live in northern New Jersey are not people who let the grass grow under their feet,” Nesci said. “It’s not a place where people just hang out and relax.

This is a place for movers and shakers who need to get things done whether that’s running their life or running their business.”

Nesci joined Boiling Springs in April 2018. He was aware of the name-change process the institution was engaged in. Not only was the company talking to its employees, current customers and future customers about the potential name change, but a third-party marketing firm was hired as well.

Financial Marketing Solutions of Nashville, Tenn., which specializes in bank rebranding, spearheaded the process which included demographic, market and customer research. Nesci himself travelled multiple times to Nashville to meet with the consultants. Eventually, Blue Foundry Bank was agreed upon.

“I can tell you the investment was significant for us,” said Nesci. “It’s more than just signs. It’s more than advertisement.

It’s training. It’s making our staff brand ambassadors.”

Nesci declined to disclose how much the name transition cost for the privately held bank in terms of a dollar figure.

“It’s not something I can tell you that involves ‘X dollars… ,’ But we always had a marketing budget so the marketing is just used differently,” Nesci said.

Jim Perry, a senior strategist at Market Insights consulting which specializes in branding and marketing for financial institutions, said he has no doubt the move to Blue Foundry Bank was a huge endeavor for the institution. (Perry was not involved in the re-branding.)

“One of the challenges for a brand that’s been around for 80 or 90 years or longer is you can start to become invisible in your markets, especially to younger customers,” Perry said. “…

They’ve got larger portions of their depositors who are, quite frankly, dying off.”

Blue Foundry Bank’s own marketing and definitions of the new brand are a mix of “true blue” mentality while targeting “movers and shakers.” Its new home page shows what seems to be a blue-collar worker busy amidst a flurry of flying sparks.

SOME RISK INVOLVED

After the better part of a century being known as Boiling Springs, Nesci said there was risk involved in the change.

“The big risk is, what if your client base doesn’t like it for some reason,” Nesci said. “But after going through the process, we were pretty confident that there was nothing real controversial about the new name.

“We felt strongly that if we explained why we chose the name Blue Foundry Bank, it would make sense. And I can tell you the response has been overwhelmingly positive,” Nesci said.

In that sense, Perry said, Blue Foundry Bank seems aware that community banks are largely successful based on emotional capital.

“Ever since the great recession, one of the great shifts in consumer behavior is that we, as consumers, expect to have more of an emotional connection to the folks that we’re actually going to do business with,” Perry said. “It could be difficult to try to position Boiling Springs as the newest, latest and greatest if there hasn’t been any visual change.”

That’s reflected in the bank’s decision to abandon its old name and staid website design. When directly asked what was wrong with the name Boiling Springs Savings Bank to lead to the change, Nesci wouldn’t answer directly. Instead, he focused on Blue Foundry. “We wanted to create a new brand name that was reflective of our customer and our locations. The brand name needed to work for the retail consumer as well as the business client. We believe our new name, Blue Foundry Bank, is reflective of both,” Nesci said.

Boiling Springs Savings Bank’s old homepage.

Blue Foundry Bank’s new homepage.

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SPREADING THE NEWS

Getting the word out about the name change has been a multi-pronged approach. Nesci said it has come through traditional platforms such as print and billboard advertising mixed with social media and digital platforms that include video. But Nesci said since Blue Foundry Bank, based in Rutherford, N.J., has only 17 branches, the company focused on a personal touch, too.

Bank officials held what Nesci calls a “gathering” with all 210 employees before the launch of the name change and they plan to hold similar meetings with customers. It’s an advantage Blue Foundry Bank has over much larger banks that have thousands of branches, said Nesci, who landed at Blue Foundry after stints at TDBank and Providence Bank.

“We held a large event for our employee base to meet them and deputize them as brand ambassadors,” Nesci said.

“They were introduced to the brand and they knew what it meant to be a Blue Foundry Bank employee and what it meant to be a Blue Foundry Bank customer and how it would integrate with the community.”

That gathering took several hours for the employees.

While the “gatherings” Blue Foundry Bank plans for customers won’t be as exhaustive for customers, they will be part of the push into the community.

“We are not a national bank and we get to do things that

smaller banks can do: More hand-to-hand, more personto-person and really we can become intimate with people on what it means to us and why we made the change,” the 46-year-old Nesci said.

EXAMINE THE DEMOGRAPHICS

Perry said the move to a new moniker has to be backed up with detailed research.

“I would hope that they looked very closely at not only the demographics of their customer base and of their markets, but that they looked at the psychographic profile, what are the banking behaviors of that particular market area,” Perry said. “They needed to come up with a refresh of their brand that aligned better with the profile of that particular market.”

Perry said the proof of any success or failure in the name change will take at least a year before true signs will show.

But the attempt to mix targeted customers is likely a move in the right direction.

“They appear to be positioning themselves as that institution that’s aligned with the working class,” Perry said.

“It tells me that their market research, whatever they did, that they’re greatest opportunity moving forward is going to be aligning with that type of profile.”

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DI D YO U S EE?

Banking Mid Atlantic publishes a weekly digital newsletter that rounds up the latest news and information about, you guessed it, banking in New Jersey, Pennsylvania and Delaware. Here are a few stories from recent editions. If you would like to subscribe to, share your news to, or advertise in the Banking Mid Atlantic newsletter, contact us at info@ambizmedia.com.

CASH CONNECT FOUNDER TO RETIRE AT THE END OF 2019

Tom Stevenson, founder and president of Cash Connect, a division of WSFS Bank will be retiring at the end of 2019 after 23 years with the companies.

Stevenson conceptualized Cash Connect and founded the company in January 2000. Under his leadership, Cash Connect expanded rapidly to become an industry innovator and the second-largest provider of ATM vault cash management and cash logistics services for approximately 26,600 non-bank ATMs and remote cash capture (smart safe, recycler and kiosk) units nationwide. He oversaw the launch of proprietary technology that helped shape the cash logistics industry, providing expanded ATM options across all 50 states and merchants with expedited cash flow, improved efficiency and enhanced safety and security.

Executive leadership of Cash Connect will be assumed by WSFS’ executive vice president and chief financial officer Dominic C. Canuso.

Reporting to Canuso will be Cash Connect’s senior management team, including John Clatworthy in his role as senior vice president and chief customer and strategy officer, and Suzanne Ricci as senior vice president and chief operating officer. Allan Matyger, who was recently promoted to senior vice president and chief technology officer, will also report to Canuso and will round out Cash Connect’s senior management.

“Tom’s demonstrated commitment to innovation transformed Cash Connect from an idea in the late1990’s into an industry leader in ATM vault cash, smart safe and cash logistics services. On behalf of the entire WSFS Bank family, we thank Tom for his entrepreneurial leadership and wish him all the best as he and

his wife Rene begin their next chapter of life spending more time with family and traveling,” said Rodger Levenson, president and CEO, WSFS. LAFAYETTE AMBASSADOR BANK BRANCHES BEING RENAMED Nineteen branches of Lafayette Ambassador Bank in Pennsylvania will assume new names come September. Going forward they will be known as Fulton Bank branches.

The Saucon (Penn.) Source reports that in a letter to customers dated July 5, the bank announced that on Sept. 14, 2019 its branches will be rolled into the Fulton Bank brand.

Fulton Financial Corporation already owns both banks, and the letter noted that “for over 32 years, Lafayette Ambassador Bank has been a part of the Fulton Family.”

Customers will receive a “consolidation guide” containing

August 2019 | BANKING MID ATLANTIC

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important information about their accounts in mid-August, the company said.

The letter also says staffing will remain the same at Lafayette Ambassador’s branches and that customers will “have access to the same products and services.”

88 BENEFICIAL BANK EMPLOYEES FACE LAYOFFS

More than 70 employees of the former Beneficial Bank in Pennsylvania face layoffs, according to a state labor filing by WSFS Bank. The notice comes after a recent merger of the two banks. An additional 17 are being laid off in New Jersey.

Delaware Business Now said WSFS plans to close about 25 percent of the offices of the combined company and eliminate some duplicate positions.

The company’s strategy was outlined prior to the merger’s completion earlier this year.

The notice indicated 71 employees would be affected by the notice that is listed as a layoff and will become effective on Aug. 30. No WARN notices were filed with the Delaware Department of Labor.

The Philadelphia Inquirer also reported an additional 17 employees are being laid off at a regional center in Burlington City, N.J. WSFS last fall said it could cut as many as 350 of the combined banks’ 2,100 positions as it shuts duplicate branches and streamlines computer systems. CEO Rodger Levenson says the bank will use some of the savings to improve its online and mobile services, according to the Inquirer.

Attrition and employees moving to other branches are expected to lead no staff reduction in the branch system. The company has also seen staff move to jobs at other financial services companies.

VALLEY NATIONAL ACQUIRES ORITANI BANK

Valley National Bancorp, based in Wayne, N.J., announced it is acquiring Oritani Financial Corp., which is headquartered in the Township of Washington, N.J. The transaction is valued at $740 million and doubles Valley National Bank’s market share in demographically attractive Bergen 22

BANKING MID ATLANTIC | August 2019

County and enhancing its presence in Hudson County.

The combined company at close is expected to have approximately $38 billion in assets, $30 billion in loans, $29 billion in deposits, and 245 branches across New Jersey, New York, Florida, and Alabama.

Valley, and its wholly owned subsidiary, Valley National Bank, has approximately $32.5 billion in assets, $25.4 billion in loans, $24.9 billion in deposits and 245 branches in New Jersey, New York, Florida and Alabama. The acquisition is expected to close late in the fourth quarter of 2019, subject to standard regulatory approvals, shareholder approvals from Valley and Oritani, as well as other customary conditions.

Oritani, and its wholly owned subsidiary, Oritani Bank has approximately $4.1 billion in assets, $3.5 billion in loans, $2.9 billion in deposits, and maintains a branch network of 26 offices.

Under the terms of the definitive agreement signed by the companies, each Oritani shareholder will receive 1.60 shares of Valley common stock for each share of Oritani common stock they own.

In conjunction with the closing of this transaction, Valley is planning on restructuring approximately $635 million of higher cost FHLB borrowings. Valley anticipates the result of the merger, combined with debt restructuring will be immediately neutral to slightly accretive to earnings per share and tangible book value while increasing Tier 1 Common Equity by over 50 basis points.

IS FINTECH POWERING DELAWARE’S ECONOMY?

Delaware’s economy is continuously developing and it seems to be growing hand-in-hand with the financial technology sector within the state.

A report researched and authored by the Delaware Prosperity Partnership, First State Fintech Lab and the University of Delaware’s Institute for Public Administration, details the latest developments and innovation in financial services.

The report notes that thanks to JPMorgan Chase, Capital One, M&T Bank, WSFS Bank, and Citibank, the talent pool in banking and financial

services has grown and accounts for nine percent of all jobs in Delaware, the highest share of any U.S. state.

In addition to being a destination location for traditional banking, fintech companies from around the world are choosing Delaware.

Examples include Irvine, Californiabased Acorns, which opened a satellite operation at The Mill in Wilmington; Delaware-basedFair Square Financial, which recently expanded and moved into a 22,000 square-foot facility in Wilmington; and Marlette Funding, which is expanding and creating more than 200 new jobs and making a $7.5M capital investment in New Castle County.

ACTIVIST INVESTORS LED TO DNB SALE

DNB Financial Corp agreed to be acquired by Western Pennsylvaniabased S&T Bancorp for $206 million in stock. The move comes after two investment bankers demanded a sale be pursued because the company was underperforming and had no strategic plan.

The Philadelphia Business Journal reports DNB has been under fire since January from investment bankers J. Abbott Cooper and John B. Thompson II of CT Opportunity Partners, who owned 6.5% of the bank’s stock. As their complaints persisted, DNB’s stock price increased by almost 49% this year as Wall Street quickly identified it as a likely seller.

“Looks like a great result,” Cooper said in an email to the newspaper.

“Need to read merger agreement, etc., but [it] shows how the board can really deliver value when they focus on it.”

S&T expanded into the central Pennsylvania market in 2015 and focuses its strategic growth strategy on Pennsylvania, Ohio and New York.

Now the bank extends its footprint into Southeastern Pennsylvania, gaining a $1.1 billion-asset bank with most of its footprint in Chester County — the wealthiest of Pennsylvania’s 67 counties.

AN YTHI N G B UT B A NK ING

| By Keith Griffin

Alma DeMetropolis,

president of the New Jersey Market Leadership Team and Market Manager for J.P. Morgan Private Bank’s New Jersey Market

Alma DeMetropolis has been with J.P. Morgan since 1992 as part of a career that spans 22 years. Banking MidAtlantic caught up with her during a break in her busy reading schedule.

“My favorite word is HOPE=Help One Person Everyday.”

FAVORITE SPORT I enjoy hiking, jogging and tennis. I very much enjoy watching college basketball and listening to baseball on the radio, especially when I’m cooking in the evening. It’s relaxing.

When I was younger, I played basketball all the time.

MUSIC I like different kinds of music. My most recent concert was Billy Joel. He continues to be spectacular. I’m also on the board at NJPAC (New Jersey Performing Arts Center). I love the jazz concerts and Savion Glover.

MOVIES I love the Jason Bourne Series. I’ve also watched the Notebook and E.T. many times and never get bored.

TELEVISION I very much enjoyed the Game of Thrones series. It needs a second go around given the complexity. I was addicted to the “24” series too and really enjoyed Homeland.

BOOKS I read a lot of non-fiction, biographies and history books.

I’m in the middle of three books at the moment. (I know that sounds crazy.) I am more than half way through Ron Chernow’s Alexander Hamilton. I’m also reading David Brooks’ The Second Mountain and just started Melinda Gates’s book, The Moment of Lift. I love reading and wish I had more time to do it. I just finished Becoming by Michelle Obama and Fascism by Madeleine Albright.

WHAT TOPS YOUR BUCKET LIST? So many things, but a few standout.

I would like to run the Athens Marathon, which is known as the original marathon course and it was the same course used in the 2004 Athens Olympics. Second, I’d love to visit Egypt. And third, visit all 59 US National Parks with my family.

HOBBIES Anything to do with exercise helps me unwind. I try to get out for a walk or a hike as often as a I can and of course enjoy relaxing with a good book. When I travel, I use it as an opportunity to learn more about the place I’m visiting.

FAVORITE PLACE TO VISIT Smugglers Notch and Stowe in Vermont during the summer is beautiful. Outside of the US, I’ve also visited Santorini and Venice multiple times and enjoy them more each time.

CUISINE I love to cook, it’s relaxing. I love making a Spanish tortilla. Banana nut bread and chocolate cake are my favorite things to bake. I could eat anything Greek/ Mediterranean any day of the week.

MOTTO I think in life you need 3 kinds of bones to succeed in life, a funny bone (to be positive), a wish bone (to be a dreamer) and backbone (to be strong). My favorite word is HOPE=Help One Person Everyday.

ADVICE Luck is when opportunity meets preparation – you have to work hard to move ahead. Take setbacks and make them comebacks. Having challenges and failing is all part of personal growth. Learn from your experiences and mistakes.

SOMETHING YOUR CO-WORKERS DON’T KNOW ABOUT ME: I was a ball girl at a Mets game when I was 7 years old.

August 2019 | BANKING MID ATLANTIC

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STAT IST ICS

Do You Get Recognition For Your Bank’s Strong Community Contributions?

M

By BRUCE PAUL, Special to Banking Mid Atlantic

any community banks and credit unions pride themselves on the contributions they make to their communities.

This includes supporting local charities, funding scholarships, planting trees or otherwise helping their neighbors.

While these great acts can certainly be their own reward, community banks also deserve public recognition for their great works. Other than the obvious benefits to the community, the contributions a bank makes to its community have two strong benefits for the bank itself.

The first is the influence on prospects, or non-customers. Many prospects learn about potential banks from advertising or from community involvement. Our studies show that advertisement is generally more effective at raising awareness among prospective customers than community works alone. Indeed, this is why many banks set aside large budgets for traditional marketing campaigns.

However, our studies of bank customer

behavior show that while ads are better at driving awareness, community contribution can be more effective at driving consideration. The latest results of the New Jersey Prospect Brand Benchmarks show that strong community contribution increases prospects’ consideration of your bank by an average of 166 percent. For Pennsylvania it is even higher at 171 percent. Not a bad side-effect! And for smaller banks with lower awareness, the increase is even higher.

Community contribution increases consideration by prospective customers by 166-171 percent.

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BANKING MID ATLANTIC | August 2019

The second area of impact is the influence on current customers.

When current customers see their bank’s involvement

in the community, it can improve the esteem they already have for their bank. Our interviews with hundreds of thousands of customers across PA and NJ show the positive impact can increase their loyalty to the bank, meaning they are less likely to leave and more likely to increase long-term spending with their bank. The Benchmarks show that recognition of community contribution increases customers’ share of wallet significantly with their bank and their long-term loyalty goes up by 88 percent.

While it is probably not a big surprise to some that contribution to the community has an impact on the top and bottom lines, many banks are not actually getting the benefit they should be. Many community banks and credit unions spend a lot of money and effort

contributing to the community, but their current and potential customers simply don’t know about it.

This is very frustrating to marketing and community giving leaders in some banks, and a wasted opportunity for many.

It is very important to know just how much recognition you are getting for your good work, and how you can improve that ROI. The challenge for banks is breaking through the clutter to ensure your customers and prospects appreciate your contribution.

Community contribution increases current customer loyalty by 88 percent.

The first step to getting the maximum credit (and business impact) from your community contribution, is to understand how you currently stand with customers and prospects, in your specific market and in relation to your competition.

• Do your current customers see and appreciate your good work?

• Do your prospects?

The second step would be to make reasoned adjustments and tweaks to the programs to see what the impact is. A bank may need to • improve its community outreach to gain greater recognition, or • it may need to emphasize different types of community involvement to broaden its exposure.

Spring, summer and the holiday season are times of increased giving and involvement in community affairs so recognition can go up. But it can also be harder to differentiate since other institutions are increasing their involvement as well.

The third step is to measure the impact: • How much do the changes move the needle in terms of recognition of community contribution?

• How much does that recognition impact awareness of the bank and consideration to use the bank in the future?

Tracking your ratings over time will show you exactly how your community contribution, and all other marketing efforts, are truly impacting how your prospects and customers view you. This will allow you to fine tune your programs, so you get the maximum benefit for the bank while doing the maximum good for the community.

So as competition for mindshare increases, consider your community involvement activities – what are you currently doing? Are you sure you are getting the credit you deserve?

What can you do differently? And most importantly, what you can you do to make sure your current and prospective customers see what you’re doing?

Bruce Paul

Bruce Paul is president and CEO of Customer Experience Solutions, which produces the semiannual Mid Atlantic Banking Benchmarks.

Establish Nonprofit Partnerships In one specific suburban market, two community banks had equivalent amounts of community involvement in terms of (a) gifts to charity, (b) hours volunteered by their staff, and (c) the total number of sponsorships. However, one of the two banks was rated 275 percent higher in terms of community contribution by their respective customers and 388 percent higher by non-customers (prospects).

While each bank made similar levels of contribution to the community, one was using much more efficient channels and coopting local nonprofit partners to get the word out. Not coincidentally, the bank with the better outreach is currently achieving stronger growth in new customers, especially commercial customers.

*Community Contribution Rankings, as rated by banked adults and businesses in Pennsylvania and New Jersey: Northern New Jersey 1. SB One Bank 2. BCB Community Bank 3. TD Bank 4. Regal Bank 5. Atlantic Stewardship Bank Central New Jersey 1. TD Bank 2. Bank of Princeton 3. Peapack-Gladstone Bank 4. Manasquan Bank 5. OceanFirst Bank Southern New Jersey 1. Crest Bank 2. Sturdy Bank 3. Citizens Bank 4. OceanFirst Bank 5. Republic Bank Western Pennsylvania 1. Somerset Trust 2. PNC 3. Dollar Bank 4. Farmers National Bank of Emlenton 5. Citizens Bank Southeast Pennsylvania 1. First National Bank of Newtown 2. Harleysville Bank 3. Embassy Bank 4. QNB Bank 5. Lafayette Ambassador Bank

Northeast Pennsylvania 1. Honesdale National Bank 2. Fidelity Bank 3. Wayne Bank 4. First National Bank of PA 5. Citizens Bank North Central Pennsylvania 1. First Columbia 2. Jersey Shore Bank 3. Citizens & Northern Bank 4. FNB Bank 5. The Muncy Bank South Central Pennsylvania 1. Ephrata Bank 2. PeoplesBank 3. Fulton Bank 4. Union Community Bank 5. F&M Trust Central Pennsylvania 1. CNB Bank 2. First Commonwealth Bank 3. First National Bank of PA 4. Riverview Bank 5. Northwest Bank *This is the contribution that the public perceives and does not necessarily line up with the actual level of community contribution due to related marketing campaigns (or lack thereof).

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M & A

The Ostrich Effect

NOT PLANNING FOR AN M&A IS NOT AN OPTION ost, if not all, community banks are wholeheartedly committed to remaining independent in order to better meet the needs of their respective communities. However, banks must also be mindful of alternative paths that have the potential to provide an increased return to shareholders.

Over the past several years, there have been more than 250 bank acquisitions annually. Community banks with total assets of less than $500 million have been involved in more than 75 percent of these transactions. Planning for a possible merger or acquisition is extremely important, but many community banks’ plan is to simply not have a plan, avoiding the topic altogether.

Savvy bank leaders recognize the importance of mergers and acquisitions (M&A) planning, and while it may be uncomfortable, recognize how critical M&A planning is to the future success of the institution.

All too often, boards and management teams fail to discuss and plan for a potential sale transaction for fear that the planning might actually make it happen. It’s similar to how individuals are often reluctant and uncomfortable discussing estate planning, wills and trusts with their aging family members. No one wants to “plan” for the death of a lovedone, but most responsible adults understand the importance of being prepared for the transition.

THINGS MOVE QUICKLY

Many boards, CEOs and CFOs may find themselves at the M&A table in an unexpected turn of events. Once

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there, the pace accelerates so quickly that if the board and management team have not spent a considerable amount of time thinking through all aspects of this scenario as a viable option, they may be surprised at the number of items they miss prior to signing the definitive agreement (“DA”).

For example, do your compensation programs align with each other and provide the protection desired for key executives and the employee base as a whole? If not, it may be too late to make changes to them once you are having discussions with potential partner(s), especially if you are a public company due to SEC filing requirements. Your investment bankers and attorneys will be focused on the financial terms of the transaction (as they should be), and not necessarily the operational or social issues. However, most deals fail to achieve the desired financial results due to poor planning of social and operational issues. At the end of the day, mergers are truly about people.

As with any transaction, sellers have a certain amount of leverage prior to signing the DA. Nevertheless, once the DA is signed and the transaction is announced, 100 percent of the leverage shifts to the buyer. Anything that is not included in the DA is

OVER

M

By KIMBERLY SNYDER, Special To Banking Mid Atlantic

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now up for determination by the buyer.

A PREPAREDNESS PLAN

We believe it is best practice to develop a M&A Preparedness Plan, not necessarily to “plan” for the sale of the company, but to be prepared in the event that an offer comes your way that you cannot refuse, similar to a Crisis Communication Plan. You hope you never have to execute one, but it is a good feeling to know you have one in place if necessary.

Here are a few human element considerations that if handled incorrectly, or not planned for appropriately, could negatively impact the overall transaction’s chance for success: • What percentage vote is required for a merger or acquisition? Do non-votes count as no-votes?

• Do your key employees have active employment agreements that have change-in-control protection? Does everyone (board members and those key executives) understand the financial implications of this protection? Are change-in-control triggers single or double?

• How will the severance amount that exceeds the IRS 280G

# OF BANK ACQUISITIONS ANNUALLY.

limitation be handled? Do you know who may be negatively impacted by the 280G limit? • Do those employees understand the limit and how it is calculated? Have you considered how to increase the 280G limit for key employees?

• What role does your current CEO want to have with the surviving entity?

• Who will be responsible for preparing due diligence materials and how will it be handled in a confidential manner? To be clear, most likely it will not be your CEO. • How important is reverse due diligence?

• Do your company-wide compensation plans work as intended under the lens of a sale?

Do they protect the employee base as a whole?

• Which employees are critical to “tie up” to make the merger successful?

• Have you identified the critical operational employees to ensure a successful conversion to the new core system? How will you retain them when they most likely will not be offered permanent positions with

IF DEVELOPED PROPERLY, YOUR M&A PREPAREDNESS

PLAN WILL BECOME A DETAILED ROADMAP TO FOLLOW THAT WILL ENSURE THE IMPORTANT ISSUES WILL BE ON

THE TABLE FOR DISCUSSION DURING THE NEGOTIATION. the surviving entity?

• How do you want the process and timeline for the purchaser to decide on which employees will be displaced to be handled? Do you want input? If so, be prepared!

of the negotiation, it does guarantee you will be prepared and will have worked through the various issues in a thoughtful manner. If this decision is made, it will be the most important decision in the company’s history.

Don’t be like an ostrich and get caught with your head in the sand by letting unpreparedness re-write the bank’s legacy.

These items truly represent a small fraction of the number of issues that should be considered when developing your M&A Preparedness Plan. If developed properly, your plan will become a detailed roadmap to follow that will ensure the important issues will be on the table for discussion during the negotiation.

While it doesn’t guarantee you will get Kimberly B. Snyder everything you want out

Kimberly B. Snyder is president and founder of Roanoke, Va.based KBS Results, a financial services consulting firm with the focus of helping banks solve problems. Prior to founding KBS, Snyder was with Valley Financial Corporation and Valley Bank in Roanoke, Va, where she was EVP and CFO. August 2019 | BANKING MID ATLANTIC

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DI V E R S ITY

How Unconscious Bias Hurts Your Organization COULD CAUSE TALENT AND FINANCIAL DEFICITS

By KAREN KIRCHNER, ELLEN KEITHLINE BYRNE, and DENISE D’AGOSTINO, Special to Banking Mid Atlantic

H

aving a diverse workplace has been proven to result in greater creativity, better decision making and a healthier bottom line. And yet, despite many well-intentioned diversity efforts, we still find mostly white men at the top of organizations.

WHAT’S GETTING IN THE WAY? Unconscious bias is one important factor. According to Catalyst, the global non-profit focused on women’s advancement, “Unconscious biases can have a significant negative impact on workplaces, leading to differences in who gets hired and recruited, who gets offered new opportunities, and whose voice is listened to in meetings.”

Although we focus on gender bias in this article, unconscious bias is equally harmful in the areas of race, ethnicity, and other ways in which we are different.

Research shows us that if unchecked, our biases cause us to underestimate women’s performance and overestimate men’s. In one study, replacing a woman’s name with a

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man’s name on a resume improved the odds of getting hired by more than 60%. If your organization is falling into this trap, you’re probably not hiring the best people for the job. And your results are likely suffering as a result.

Business professors Cristian Deszö of the University of Maryland and David Ross of Columbia University studied the effect of gender diversity on the top firms in Standard & Poor’s Composite 1500 list, a group designed to reflect the overall U.S. equity market. First, they examined the size and gender composition of firms’ top management teams from 1992 through 2006. Then they looked at the financial performance of the firms.

In their words, they found that, on average, “female representation in top management leads to an increase of $42 million in firm value.” They also measured the firms’ “innovation intensity” through the ratio of research and development expenses to assets. They found that companies that prioritized innovation saw greater financial gains when women were part of the top leadership ranks.

HOW CAN WE LESSEN THE IMPACT? If we accept that unconscious bias has a negative impact on organizational performance, what do we do to lessen its impact, or eliminate it altogether?

The tricky thing about biases is that we all have them.

In her Harvard Business Review article, “How to Reduce Personal Bias when Hiring,” Ruchika Tulshyan explains, “we are, in fact, biologically hardwired to align with people like us and reject those whom we consider different.” This comes from the days when a quick judgment about friend or foe meant the difference between life or death.

Now, those primitive parts of our brain aren’t so helpful. Increasing our awareness of when biases may be influencing us and questioning our assumptions is critical. We can do this by inviting others to challenge our thinking, or by “flipping the script” and asking ourselves if we’d be making the same decision if someone of a different profile were involved.

For example, if you are hesitating to promote a female team member because you’re not sure she has what it takes to succeed at the next level, ask yourself: • What skills are critical in the new position?

• What opportunities have this candidate been given to demonstrate these skills?

• What kinds of challenges has she successfully overcome in the past?

• And most importantly, if she were a man, would I have the same doubts?

UNWITTING BARRIERS Here at Her New Standard, we have developed a six-month women’s leadership acceleration program with the goal of helping women to increase their influence. Companies send their high potential women to us because they want to fast track their development. And yet our participants tell us about the barriers that organizations unwittingly put in their way.

One woman who works on the trading floor of a global financial firm explained how her male peers invited a client she works closely with to play golf and didn’t think to include her. When asked why she wasn’t invited, they told her they assumed she didn’t play golf. Being left out of these informal bonding opportunities makes it hard for women to build the trust and relationships that result in

lucrative deals and subsequent advancement.

Executives often believe they are hiring and promoting people fairly when in fact, they are missing the mark. In the Harvard Business Review article, “Numbers Take Us Only So Far,” Maxine Williams cites research that shows that individuals who believe they are objective are often those most likely to apply unconscious bias. So, what can leaders do to ensure they are making decisions based on the criteria that really matter?

Catalyst suggests taking these actions to combat unconscious bias: 1. Enlist stakeholders from a range of backgrounds to help make decisions more inclusive, including equal numbers of men and women.

2. Give others – particularly those different from you – a chance. Be open to learning from them as much as they can expect to learn from you.

3. Intentionally mentor and sponsor people who are not like you.

4. Call it out when you see others making judgments based on vague criteria such as cultural fit. Find out what’s really at the root of their discomfort.

The more we question our assumptions and become aware how we use unbiased information to make our decisions, the greater the chance we will give opportunities to those who can get the best results for our organizations.

That way we can all thrive.

Her New Standard LLC was founded by, from left, Denise D’Agostino, Karen Kirchner and Ellen Keithline Byrne, a team of organizational leaders, executive coaches and a PhD, who create programs specifically for women leaders to help them rise up in today’s competitive world and make their mark.

For additional information, visit www.hernewstandard.com.

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Senior Management & Leadership | October 16, 2019 RESORTS CASINO HOTEL / ATLANTIC CITY, NJ

www.bankhorizons.com Don’t miss BankHorizons Senior Management & Leadership, October 16, 2019, Atlantic City, NJ - Mid Atlantic’s gathering of C-level banking executives looking to take their institutions to the next level.

Thought leaders will be on hand presenting on topics that should be top-of-mind for key executives at financial institutions in the Mid Atlantic region, such as corporate synergy, disruption, team-building and corporate culture.

Not for the faint of heart – this will be a sobering but motivating meeting of some of the top minds in the industry.

There’s nothing quite like standing face-to-face with potential new clients. At American Business Media, we are proud to be the nation’s largest producer of bank and credit union conferences, putting financial executives in direct connection with vendors and advisors who help them succeed.

REGISTER

NOW!

To see all of our banking shows, visit bankconferences.com or call 860.719.1991.

Our 100 years means that wherever you are going, we can guide you there.

WILLIAM J. NOWIK, PRINCIPAL IT ASSURANCE SERVICES

At Wolf & Company, we pride ourselves on insightful guidance and responsive service. As a leading regional firm, our dedicated professionals and tenured leaders provide Assurance, Tax, Risk Management and Business Consulting services that help you achieve your goals.

Visit wolfandco.com to find out more.