"And I will hand it over to Marianne, who will start the detailed stuff."

When it's time to talk numbers in investor presentations, the CEO often passes the mic to the chief financial officer. But when Jamie Dimon gave the floor to CFO Marianne Lake at a critical investor day for JPMorgan Chase in February, the move spoke volumes about the role bank CFOs now play.

That annual investor meeting in New York was the company's opportunity to face off with analysts and other pundits who had spent the last couple of months pondering if the behemoth might be better off broken up. But after brief opening remarks, the usually loquacious and combative Dimon allowed Lake to do most of the talking.

Drinking from a New York street-cart coffee cup ("we are happy to serve you"), Lake gave the Starbucks-sipping crowd the "detailed stuff" — more than 8,500 words on the company's performance, its scale, its plans to trim $5 billion from expenses over the next few years, and most importantly, its defense for keeping JPMorgan and Chase Bank together.

"These are not trivial things and the expense synergies are real, and they're significant," Lake said, describing how revenue would stay the same but expenses would balloon if JPM were broken up, as separate companies built out audit and finance functions, data centers and other cost centers.

If banking is under attack, as Dimon has said, then CFOs like Lake are the defender of the realm. Equipped with the numbers, they are uniquely positioned to bring the credible answers their stakeholders seek and the changes their companies need.

"When the fire gets hot, the CFO is the person fighting fires, because remember what skills sets they are bringing with them," said Samuel Dergel, a director at Stanton Chase who specializes in the recruitment of CFOs. "The CFO can be continually called upon to make difficult decisions and making the case for continuing on the tough road."

Even in a company like JPMorgan, with its charismatic, if perhaps polarizing leader, it is the CFO who comes out guns blazing at the investor day to defend her company's honor, or at least its structure. And despite JPMorgan's size and complexity, CFOs across the country can likely relate to Lake. They've seen their role elevated in the post-crisis era.

CFOs are now described, variously, as the "guardians" of their companies, the "conscience," the "integrity," the "truth tellers," the "firefighters," the "interpreters," the "liaisons," and the "scorekeepers."

Call them any of these things — they, along with the people who hire them, train them and needle them, do — just don't call them the bean counters anymore.


The role of the CFO changed as the industry changed.

Banking was a lot simpler prior to the financial crisis of 2008. Regulation was lighter and the earning environment was easier. Or maybe it just seemed easier, and really, the crisis ripped the wool off and exposed a complex industry that needed better oversight.

Either way, those who understand how the business works and have the ability to convey what is happening have lots of value today.

"It used to be pretty easy to make money as a bank. We never lost money on loans and values kept going up. So there weren't as many questions," says Paul Clemens, the CFO of First Midwest in Itasca, Ill., when asked why he thinks the finance role has been elevated. "Everyone wants to know more now."

"Everyone" includes the regulators, the shareholders, the board and the staff.

It also includes the chief executive officer, Clemens said, adding that a lot of what he does is interpret what First Midwest's lenders are doing to Mike Scudder, the company's chief executive, who served as the company's CFO until 2007.

"I'm the liaison between [departments] and the CEO and it is my job to put a discipline around what they are doing," Clemens said. "I'm here to help them interpret what it is that they are doing."

The expansion of the CFO's role is directly tied to the heightened role of the CEO, because ultimately the responsibility of the company lies at that top spot. That leader needs an equally strong bench.

"There is nothing like a financial crisis to make the CFO the CEO's best friend because the CFO provides integrity and confidence," said David Axson, a managing director in Accenture Strategy who focuses on CFOs and enterprise value.

The CFO is also spending more time with other members of the executive team, specifically the chief risk officer, said Daryl Bible, CFO of the $189 billion-asset BB&T in Winston-Salem, N.C. Bible said he and Clarke Starnes are "tied at the hip."

"We're considered the guardians of the company," Bible said. "Whether we are talking about the pocketbook or how do we weigh risks versus returns, we have to be in sync in how we are going to drive major projects."

The concept of the integrity that the CFO brings as a backstop the company was a recurring theme in conversations with dozens of bankers and experts.

"The CFO as the truth-teller has become the focal point of all the new regulation," said Deniz Caglar, a partner at Strategy&, who follows organization, change and leadership for the firm. "'Prove this, demonstrate that' — the demands increased especially in 2009 to 2011."

It makes sense — when the crisis hit, the validity of the numbers was hard to gauge and there was skepticism everywhere. Were the banks really accounting for all their problem loans? Did the bank really have enough capital? Were they really going to make it?

For the largest banks, today the integrity and confidence of the company's health can set the course for how the company returns capital to shareholders as permitted by the annual Comprehensive Capital Analysis and Review. The Federal Reserve judges how the banks think they'd perform in a distressed economy compared to the Fed's projections. A wide variance can lead to the banks having to reduce dividends and share repurchases.

The CFOs are diving deeper, too. For instance, Clemens of First Midwest wants to know what the loan loss reserve is going to look like two quarters from now.

"What I used to spend a couple of hours a month on is now something I spent a lot of time looking at," Clemens said.


If overseeing the finances of the company is the meat and potatoes of a CFO's job, shaping and managing the strategy is the salad and the plate is looking a lot greener these days.

Playing a central role in the strategic direction of their bank is clearly a major piece of how CFOs self-identify. In a recent survey conducted by American Banker Research, more than a third of the respondents described their job as either the leader of strategic execution or a strategic adviser. Another 10% described themselves as the driver of change and in the write-in portion of the survey several discussed how they are involved in developing the strategy and executing on it.

Succinctly, one said, "I make things happen and hold my co-workers accountable for their responsibilities."

It is clearly a great sense of pride for the CFOs and they see it as a rewarding aspect of their job.

"It has its hassles, but being a CFO is still a lot of fun," said Charlie Christy, CFO of CoastalSouth Bancshares in Hilton Head, S.C. "I have a global view of the company…I get to be very analytical and then switch to strategic and balance the two to figure out what's right for us."

The concept of the strategic CFO is not new, of course. Over the last decade or so, the CFOs have been playing an increasingly tactical role in their banks, said Mark Fitzgibbon, the director of research for Sandler O'Neill. As a result, the position has been elevated because they are able to marry the numbers to the story.

"CFOs today are much better strategic thinkers," Fitzgibbon said. "The CFO has stepped out into the limelight over the last decade and we've seen a continual upgrade of the talent."

Banking is behind other industries in viewing the CFO role as a strategic, says Caglar of Strategy&. Part of that is because of the financial crisis, but the industry is quickly playing catch up.

With revenue depressed from the artificially low interest rate environment and so many parts of the business needing investment, where and how banks can spend cries out for a CFO who can view the business strategically.

"The CFO is the neutral thought leader — 'where do we need the resources and what do we need to win consistently in the marketplace?'" Caglar said. "The CFO gets to have the dispassionate view, an objective view of where it makes sense to invest."

Part of managing the strategy also means dealing with problems so that the CEO can remain focused on the future.

"Because they're the keepers of the data, they can identify [the problem], marshal the resources and lead it to success and then move on to the next one." said Christy, who previously served as CFO at Citizens Republic Bancorp, now a part of FirstMerit. (He also served as the CFO for various parts of Bank One in the 1990s.)

"Because who else is going to do it? The CEO is supposed to be focused on two years ahead."

CFOs at some of the banks that weathered the downturn well pushed back at the idea that the role of the CFO is becoming more focused on strategy. They say strategy has been an important part of their job all along.

"We are conservative and have been successful in building a strong balance sheet and it has very much been a team effort," Bible said. "We meet every week and during the crisis there were times when it was [on] an everyday basis. Everyone on the team has a say in the majority of our decisions."

Similarly, Nancy Davis, CFO of the $2.5 billion-asset Stock Yards Bancorp in Louisville, Ky., said the executive team at her company has long been "collaborative and conservative." The company notably raised $30 million in single-issue trust-preferred securities in early 2009 at a time when capital raises and especially trust-preferred raises were incredibly difficult for banks.

"Has the CFO been elevated? Well, I certainly haven't been demoted," Davis said. "I was a key part of the strategic team before and after the crisis, but I could see how others in the industry see it as an elevated role."


CFOs know the numbers, they are a key part of the setting and overseeing strategy and they are also called upon to tell the story of those two forces a whole lot more now.

Of course, communicating with analysts and investors has always been a key part of the job and for some, the best part.

"I enjoy the opportunity to help set the direction for our company and then tell our story — to investors and other constituents," said Karen Parkhill, CFO of Comerica in Dallas. "As CFO, you get to do that a lot. And, in for-profit companies, performance is most commonly measured financially."

To Wall Street, the CFO is definitive voice, said Nancy Bush of NAB Research, because "the CEO doesn't always know the numbers."

CFOs are spending more time with investors and that also reflects a changing landscape among the shareholder bases of banks.

Stock Yards in Louisville, for instance, has seen its institutional shareholder base increase from about 20% to 35% in the last decade, says CFO Nancy Davis. Traditionally, the company's shareholders were from the community — the type who likely inherited the stock from grandpa who "told us to hang on to this bank stock," she said. As long as the company is profitable and paying its dividend, those shareholders don't ask for much.

Institutional shareholders are decidedly different. They watch estimates and follow industry trends and are quick to let companies know when they disapprove. And they talk among each other, Christy of CoastalSouth says.

"The behavior of shareholders has morphed and that has made us more aware of things like our corporate governance, our compensation committees and our board involvement. We are more attentive," Davis said. Such interactions are "not the things that make us money, but they're important."

Perhaps tied to the rise in institutional shareholders, there are a lot of investor conferences these days. Anecdotally, it seems like CFOs are playing a more central role in that circuit than they did in the past, but the data is kind of lumpy. Sandler O'Neill and D.A. Davidson, for instance, didn't show a noticeable increase in the number of CFOs presenting at their conferences, but Keefe, Bruyette & Woods did. In 2010, 49% of the companies sent their CFOs either alone or as part of a team to their annual banking conference in Boston. This year, 75% of companies sent their CFOs alone or with others.

Still, the investor conference format overall has changed, Fitzgibbon of Sandler says. The format of executives speaking at the front of the stage with a presentation is giving way to more fireside chats and a lot more private meetings.

"At the investor conferences, the dialogue is different — investors want to know the numbers and they want to know the strategy," said Tim Chrisman, principal of executive search firm Chrisman & Co. "And they want to talk with the both the CEO and the CFO in many cases."

BB&T has responded to the increased demands on time from shareholders with a structured system, Bible said. CEO Kelly King typically attends a conference once a quarter and the rest of the executive management team rotates.

"I invest five to six days a quarter to shareholder issues, and as a company, we spend probably 8 to 10 days a quarter," Bible said. "We try to keep the outreach consistent. We aim to have a good rapport." Banks like BB&T have large investor relations departments, but banks like Stock Yards do not. As community bankers often say, they wear a lot of hats.

"My name is on the press releases," Davis said. "You have a question, call Nancy."

As they're spending more time with investors, CFOs are also spending more time with their boards.

Axson of Accenture says that these days the board wants to hear more from the management team, instead of just the CEO. Part of that is potential succession planning, but it is also making sure that the leadership is all on the same page.

Some CFOs say that they've always presented to the board, but again, the dialogue has changed. It is not just a delivery of the numbers. Essentially, it is quality time. For instance, Clemens of First Midwest says that the day before each board meeting there is now an event for the board to learn about a specific piece of the business.

"These sessions are two to three hours and we talk about things like branch distribution or credit cards or cybersecurity," Clemens said. "The board has asked for more education, so that's what we're doing."


Following JPMorgan CFO Lake's presentation, the heads of the company's businesses took the stage to give their presentations. As the investor day at JPMorgan closed, Dimon again took the stage and gave his own 7,400 words on the value of the company, including fielding questions from analysts. A few times, Lake helped him out.

In her defense of the company's size and scope, Lake said that "scale has always defined the winner in banking." That quote was widely used by reporters to punctuate the event.

Mike Mayo at CLSA has been among the more vocal analysts to ponder JPMorgan's value if it were broken up. He said it made sense that Lake would be the one to lay out the company's case — after all, the break-up talks rest on the numbers and it will be up to her to make sure the cost savings are achieved. He even paid the company a small compliment, mostly at the expense of other large banks that are facing the same breakup calls but haven't confronted them yet.

"It makes sense for the person in charge of the numbers to explain the strategy and show us part of the analysis, but that is JPMorgan's culture," Mayo said. "They bring out the issues into the open, debate them and come to a conclusion. I have to say, it is a refreshing aspect of the culture. They confront the monsters, or the potential, monsters out in the open."

Nancy Bush, who also follows the company, had a slightly different take. JPMorgan is strategically putting more faces out there so that its CEO is not as synonymous with the company — it lessens the chance of the company suffering if the CEO's image suffers.

"Jamie is not a welcomed person to all right now, so the company likely wants other faces," Bush said. "I think a lot of management teams are increasingly thinking it is better for bank CEOs to take a step back and let others be the face of the company."

Nonetheless, both she and Mayo think she is handling the job fairly well, one the 45-year-old Lake has had since the beginning of 2013.

Mayo called her "knowledgeable, approachable and insightful." Bush said, "by all accounts, she's a good CFO."

"Marianne is a strong defender of the strategy, she is the one who has to talk about it," Bush said. "And don't underestimate the impact of an English accent."

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