Pin Pin Chau has retired twice already, but she keeps getting lured back to banking.
Now the president and chief executive of Touchmark National Bank in Alpharetta, Ga., Chau says she is always drawn to a challenge.
"I was happily retired, but people just kept calling and saying, 'Look, would you want to do this?'" she says.
The most pressing issue facing her at the $153 million-asset Touchmark — which she joined in July — is how to diversify away from commercial real estate loans.
In a state where the real estate crash hit harder than most, the three-year-old bank is already dealing with some loan trouble. It charged off 3.46 percent of its loans in the first three quarters of last year, and another 6.86 percent were not current as of Sept. 30.
Even so, Chau takes comfort in its fat capital cushion, which she expects will give her the leeway she needs to execute on a new strategy and fuel organic growth. "We have a portfolio that is still very much commercial real estate-oriented," she says. "But we are very lucky that we have capital. That will enable us to continue to function healthily."
Her plan is to evolve Touchmark into a business bank that specializes in three niches: medical practices, businesses owned by first-generation immigrants and international trade services. Chau chose those segments based on her experience with them from previous ventures.
A longtime banker who is highly respected in the industry, Chau is best known for leading the former Summit Bank Corp. of Atlanta before its sale in 2006. The $665 million-asset Summit focused on international trade, partly because it catered to minorities, particularly Asian-Americans, with business dealings overseas.
Chau retired when UCBH Holdings Inc. of San Francisco bought Summit and thoroughly enjoyed the time off. (UCBH, which failed in 2009, is now part of East West Bancorp of Pasadena, Calif.)
But, in the summer of 2008, she agreed to be the president and CEO of a proposed startup called Trident Bank, which a group of doctors organized. Their vision for Trident had been to target doctors and other health care professionals with a payments tool that would let them track receivables more easily—a service that experts say would have been unique for a bank.
"They were looking at the doctor as a small-business person, and I thought that was very intriguing," Chau says. Though doctors want to focus on patient care, "they are more or less forced to be a small-business person. A doctor has to maintain a premise, a payroll and a book of receivables that are more complex than most other businesses."
Trident never opened. The Office of the Comptroller of the Currency approved its application, according to Chau, but the Federal Deposit Insurance Corp. — which virtually stopped allowing any new banks after the financial crisis began — refused to grant deposit insurance.
So she settled back into retirement that winter, which, for her, means indulging in lots of international travel with her husband. "We were very happy not having to worry about the economy and the banking industry," Chau says.
Then Touchmark called last year, and this grandmother of two, who says she has a "don't ask, don't tell" policy about her age, went back to work again.
Industry observers who are familiar with Chau say they are not surprised she was so in demand.
"She has a very good reputation and she knows what she's doing," says Chris Marinac, an analyst at FIG Partners.
He says she brought needed gravitas to Touchmark, which seemed to get knocked off kilter early on. It had been one of the last startups to get approved in the state before the financial crisis erupted and never managed to define itself well.
Though flush with capital, it lacked strong direction as to how and where to deploy it, Marinac says. "I think when Pin Pin came in, she answered the leadership issue front and center."
Touchmark's total risk-based capital ratio — nearly 20 percent as of Sept. 30 — is about double what regulators typically require for a bank. So Marinac says it has the wherewithal to grow. "Her challenge, I think, is really, 'What is the growth rate? What does she aspire to become?' Because it's a relatively open canvas," Marinac says. "Certainly she has the ability to take the bank in a whole different direction."
That's just what she has in mind. Chau charted her plan in a letter to shareholders at the end of the third quarter, highlighting the niches where she believes Touchmark can stand out.
She says the details of how to execute on her plan — in particular, determining how Touchmark can best market itself to doctors — are still evolving. But she considers such segmentation to be the best approach for community banks in general. "I think that for a community bank to succeed, we need to leverage our position in the payment system, and we need to decide for ourselves which niche we could be meaningful in and focus on that," Chau says. "To be a generic bank and succeed is much harder, because consumer banking is best done by the numbers, and those are the big banks' prerogative."
Though trade finance is an uncommon specialization for a community bank, Chau says Summit thrived on it. So she feels confident that Touchmark can get traction with local businesses by giving them an alternative to using the large banks, which typically offer such services from their headquarters outside the state.
"There are small importers and exporters who want more personal service from a small bank," she says. "And Georgia has become a distribution point for the southeastern United States." Atlanta, she points out, has the world's busiest airport, while the port of Savannah is undergoing a significant modernization.
She does not envision Touchmark becoming an ethnic-focused bank. She says even at Summit, which was always categorized that way, only about half of the customers were ethnic.
Still, Touchmark is courting immigrants who are business owners because Chau likes their work ethic. She says they tend to share similar characteristics, regardless of their native country. "They would work until the business succeeded," she says. "They value the relationship with the bank and they don't declare bankruptcy, because they want to survive."
The least evolved part of her strategy has to do with the doctors.
Chau says cash flow is a challenge for medical practices, which often don't know when or how much they'll get paid. So she believes Trident was on to something with its idea of trying to help doctors manage their receivables.
Through a partnership with a technology company, Trident expected to offer a service that would let clinics look up patient information from hundreds of insurers through a single Web portal and keep track of payments due.
"Since that time, I've given this idea a lot more thought, and I found out some of the obstacles. It's not so easy to make a medical doctor change his bank," Chau says. "I still want to pursue this, but I want to do it with a slightly different approach than what I originally had in mind."
She says doctors have an aversion to discussing receivables — their interest is just more in healing people than fussing over office procedures. They also have little interest in changing their billing systems, despite the potential efficiency they could gain. Chau says maybe that's partly because it is often an office manager — not the doctors themselves — who have to deal with the insurance companies anyway.
"That's my New Year's resolution: to start from square one and get input from people who manage the doctor's book of receivables," she says. "Start from there and see what value we can add."
Chau feels certain Touchmark can find a way to give doctors more insight into their finances — without requiring them to reconsider which billing service they use. She expects to work with a technology provider on a solution that the bank can use to help those customers.
Marinac says whatever course Touchmark takes, he expects it will benefit from Chau's contacts. He says she has sway with desirable customers who can boost core deposits and bring in commercial and industrial business.
"She's got customers that kind of follow her," Marinac says. "These are good core businesses who do business with the bank in multiple ways, not just borrow money."
Her ability to attract deposits could prove particularly helpful, in his view. "Anybody can put loans out, that's the easy part, it's more about trying to draw deposits and fee income. I think that's really one of her skill sets," Marinac says.
Not bad for someone who never fathomed a banking job as anything but temporary.
Chau, who grew up in Hong Kong but came to the United States to attend college, says with an undergraduate degree in fine arts and history and all but a thesis done for a graduate degree in poetry, she took her first job in banking only because she had trouble finding one in teaching.
"Once I got into a bank and started talking to business people, I found that so interesting," she says. "You could learn so much about different industries and how they each have their own set of problems and see how the business person could find a way to overcome it. They are very creative in search of that bottom line."
Luckily for Touchmark, so is Chau.
