2019 reputation rankings: The biggest movers

The banking industry has some work to do to improve its reputation.

After years of steadily climbing, banks’ reputation scores, as tracked by American Banker and the Reputation Institute, slipped for the second consecutive year in 2019, both with customers and noncustomers.

Worse, of the 16 industries the Reputation Institute tracks, only one — telecommunications — currently has a worse reputation than banks.

Banks are graded on seven dimensions — products and services, innovation, leadership, workplace, performance, citizenship and governance — and scored on a 100-point scale. A score of 80 or above is considered excellent; 70 to 79.9 is strong; 60 to 69.9 is average and anything below 59.9 is weak or poor.

Twenty-eight of the 40 banks had lower customer scores in 2019 than in 2018 and only two — USAA Bank in San Antonio and Huntington National Bank in Columbus, Ohio — had scores above 80, down from six in 2018.

Among noncustomers, the numbers were even worse. All but four banks saw their scores decline year over year and more than half had scores below 59.9. Only one, USAA, has a strong reputation among noncustomers.

Still, there is some good news in the data.

By and large, bank customers have positive feelings about their banks. Of the 40 banks evaluated in this year’s American Banker/Reputation Institute Survey of Bank Reputations, 35 were considered to have strong or excellent reputations with existing customers.

And many banks can take comfort in the fact that, while their overall scores may have slipped a bit, they moved up in the customer rankings. Associated Bank in Green Bay, Wis., climbed from No. 34 in the 2018 rankings all the way up to No. 14 this year. MUFG Union Bank in San Francisco jumped 14 places, to No. 10.

Here are the 10 biggest movers with customers in 2019.

Associated Bank
Philip B. Flynn
Headquarters: Green Bay, Wis.

Assets: $33.7 billion

President and CEO: Philip Flynn

Associated Bank jumped from No. 34 to No. 14 this year, making it the biggest mover among all 40 banks. Its customer score, which plummeted 8.7 points last year, rose 2 points to 75.9.

It’s hard to say why Associated’s score fell so sharply with customers last year — its score was in excellent territory in 2017 — but history has shown that banks’ reputation scores tend to fall when they are in the midst of buying another bank. Simply put, acquisitions can be distracting to management and staff in the short term, and customers will often notice.

Associated acquired the $2.7 billion-asset Bank Mutual in February 2018. It was its first whole-bank acquisition since 2007.

It’s now been over a year since the deal closed, and it appears to be paying off. Associated ended 2018 with record levels of customer deposits and it is adding loans at a healthy clip.

It also is clearly not done doing deals. In mid-June, it acquired Huntington’s Wisconsin operations, adding about $850 million of deposits and $150 million of loans.
MUFG Union Bank
Steve Cummings, CEO of Union Bank.
Headquarters: San Francisco

Assets: $133.4 billion

President and CEO: Steve Cummings

Union Bank soared 18 places in this year’s customer rankings, to No. 10. Its customer score climbed 1.8 points year over year, to 77.1.

A big reason for the jump is that its customers, and even noncustomers, give the bank high marks for innovation, a key driver of reputation. Among both customers and noncustomers, it ranked No. 4 out of the 40 banks for innovation.

Among its most significant innovations of late has been PurePoint, its online-only bank that launched in 2017. By offering rates on savings accounts that are among the highest in the industry, PurePoint is helping to drive double-digit deposit growth at Union Bank.

Union Bank sees itself as a disruptor, and that was evident in its decision last year to hire a retail industry executive, not a banker, as its head of digital banking. Julie Demarigny, the former vice president of innovation program management at Warner Bros., joined the bank in September.
Webster Bank
John Ciulla of Webster Financial.
Headquarters: Waterbury, Conn.

Assets: $28.2 billion

President and CEO: John Ciulla

Webster Bank had a customer score of 77.7, placing it No. 7 on this year’s list, up 17 notches from the previous year. Its score increased 1.4 points year over year.

Workplace culture and citizenship are important drivers of reputation, and Webster has been a standout bank on both fronts.

Last year, it was named by Connecticut Magazine, the Hartford Courant and Hearst Media as a top workplace in Connecticut.

The bank, which has operations in Connecticut, Massachusetts, New York and Rhode Island, was also named by the Boston Business Journal as one of the top charitable contributors the Boston area, and it received an "outstanding" Community Reinvestment Act rating from the Office of the Comptroller of the Currency.
Bank of the West
Nandita Bakhshi, CEO of Bank of the West.
Headquarters: San Francisco

Assets: $88.2 billion

President and CEO: Nandita Bakhshi

Bank of the West was another big mover in this year’s rankings, climbing from No. 31 to No. 15, with a score of 75.7.

In a year in which most banks scored poorly with noncustomers, the U.S. unit of French banking giant BNP Paribas was also one of just a handful of banks to see its noncustomer score increase.

The bank’s commitment to helping curb climate change could partly explain the improved reputation. Last year it announced that it would commit $1 billion to financing clean energy initiatives over the next five years. Its wealth management group also expanded its investment options to include renewable energy opportunities.

“Bank of the West is dedicated to the communities we serve, and these new initiatives reflect our belief that our bank can make a positive impact on society,” CEO Nandita Bakhshi said at the time. “Bank of the West remains committed to taking action for a sustainable future.”
Citizens Bank
van-saun-bruce-citizens-financial.jpg
Headquarters: Providence, R.I.

Assets: $161.4

President and CEO: Bruce Van Saun

Citizens Bank ranked No. 3 in this year’s customer rankings, moving up 12 places from last year.

Beth Johnson, its chief marketing officer, told American Banker that several recent initiatives could be contributing to the improved score.

One, called Simple, is a workplace initiative designed to encourage employees to offer suggestions and ideas for improving efficiency and, in turn, the customer experience.

Another, rolled out in 2017 called Community Connect, encourages employees to participate in random acts of kindness.

Like Bank of the West, Citizens was also one of the few banks to see its score with noncustomers improve. It placed No. 32 last year in the noncustomer rankings with a score of 59.8. This year it moved all the way up to No. 8, with a score of 61.7.
First National Bank (Pa.)
Vincent Delie Jr., CEO of F.N.B. Corp.
Headquarters: Pittsburgh

Assets: $33.6 billion

Chairman, President and CEO: Vincent Delie Jr.

First National Bank, a unit of F.N.B. Corp., first appeared in the reputation rankings last year, placing No. 37, with a customer score of 71.7.

This year it climbed to No. 25, with a score of 74.1. Its 2.4-point improvement was highest among the 11 whose scores increased year over year.

Its high levels of employee engagement likely contributed to the bank’s improved score. First National has been named a top workplace in Greater Pittsburgh by the Pittsburgh Post-Gazette for eight years running and has been recognized as a top workplace in Northeast Ohio by the Cleveland Plain Dealer for five straight years.
JPMorgan Chase
dimon-jamie-bl-9
Headquarters: New York

Assets: $2.4 trillion

Chairman and CEO: Jamie Dimon

Chase, the retail unit of JPMorgan Chase, climbed 11 notches in this year’s customer rankings, to No. 25, and its overall customer score improved by 0.4 points, to 74.1.

Its standing among customers has likely bolstered by its improved convenience. Already the nation’s largest retail bank, Chase is in the midst of adding up to 500 branches in nine markets where it previously had no retail presence, including Boston, Philadelphia, Washington, D.C., and Charlotte, N.C.

Citizenship matters to customers too, and JPMorgan Chase may be scoring points for committing hundreds of millions of dollars to the redevelopment of distressed cities, particularly Detroit, and job skills training for underserved populations.

Still, the bank isn’t getting much love from noncustomers. Its noncustomer score plunged 4.5 points, to 55.5, and its noncustomer ranking fell from 29 in 2018 to 33 this year.
Fifth Third Bank
carmichael-greg-fifth-third
Headquarters: Cincinnati

Assets: $167 billion

Chairman, President and CEO: Greg Carmichael

Like Chase, Fifth Third jumped 11 spots in this year’s rankings, to No. 22. Its score improved by 0.5 points, to 74.4.

Fifth Third has won accolades for innovative services it offers to employees as a means of retaining and attracting talent. Two years ago it began offering concierge services to new mothers to help them juggle the responsibilities of parenting, managing a household and working full-time and it later expanded the service to include financial planning for new and expecting parents.

Among noncustomers, Fifth Third’s standing slipped a bit. It ranked No. 32 this year, down from 31 last year, and its score fell by 3.3 points to 56.5.
First Tennessee Bank
D. Bryan Jordan, chairman, president and CEO of First Horizon National Corp.
Memphis, Tenn.

Assets: $40.9 billion

Chairman, President and CEO: D. Bryan Jordan

First Tennessee, the banking unit of First Horizon National Corp., saw its reputation score with customers plummet last year and, as with Associated, the reason could have been merger-related.

In late 2017, the bank acquired the $10 billion-asset Capital Bank Financial in Raleigh, N.C., in a deal that increased assets by roughly 25% and added dozens of branches throughout the Southeast. Ranked No. 2 with customers in 2017, First Tennessee tumbled all the way to No. 23 as its score fell more than 10 points, to 76.4.

Its score dipped slightly this year, but the bank — which routinely wins accolades as a top workplace — is once again moving back up the charts. It ranked No. 13 this year, with a score of 76. Among noncustomers, only USAA had a higher score.

Can it keep the momentum going in 2020? First Tennessee is changing its name later this year and, like a merger, a rebranding can potentially hurt a bank’s reputation in the short term as customers get used to the new name. The bank is rebranding First Tennessee and Capital Bank under the new name of First Horizon Bank.
Citibank
Citi CEO Michael Corbat
Headquarters: New York

Assets: $1.4 trillion

CEO: Michael Corbat

After moving up just three spots in last year’s customer rankings, Citi climbed nine rungs this year, to No. 27. Its score increased 0.6 points, to 73.5.

There’s no single explanation for the big move, but the nation’s fourth-largest bank has undoubtedly burnished its public image by taking principled stands on gun control and climate change and going further than other banks in disclosing the gaps in pay between women and minorities and white men.

The pay gap is significant — women at Citi earn roughly 70% of what men earn — but Citi has very publicly pledged to narrow it by both hiring more women and minorities and moving more of them into higher-paying managerial roles.

Sara Wechter, the bank’s global head of human resources, said diversity matters to Citi’s clients, particularly large corporate clients seeking sophisticated banking or institutional services.

“We now have clients coming to us and asking about" the makeup of females and minorities "on the team that’s representing them,” she said. “I love that corporate customers are asking these questions. It’s the right thing.”