Buying, But Also Selling
Matthew Wagner has been a banker for nearly three decades, though his recent moves suggest he may be a trader at heart.
The CEO of the $5.4 billion-asset PacWest Bancorp agreed in July to sell 10 branches in Los Angeles and San Diego, along with $145 million in deposits, to Opus Bank in Irvine, Calif. The deal, which excludes loans, is expected to cut PacWest's staffing expenses and other costs by an annual $2 million.
"Pure efficiency play, nothing more to read into it," Wagner emailed in response to a query from American Banker.
But the sale stood out given Wagner's recent acquisitive streak. Earlier this year, he outbid Umpqua for American Perspective Bank in San Luis Obispo, Calif. He also made an aggressive run at First California Financial in Westlake Village, Calif. But his unsolicited offer, for $212 million, was rebuffed by the company.
Turnout was strong for the second annual "Veterans on Wall Street" job fair, hosted in New York this summer by a group of large banks. But the industry's reputation and its rickety health are complicating some hiring efforts, as executives like Citigroup's Suni Harford acknowledged.
"The biggest issue we have is educating [veterans] about what financial services is. This is where the misnomer 'Veterans on Wall Street' is a problem-they think Gordon Gekko," says Harford, Citi's regional head of markets for North America and the senior business sponsor of the firm's CitiSalutes initiative. She thinks veterans should know that Citi considers itself "one of the largest technology companies in the world" and has "huge security networks." She says that jobs related to technology and security are something that many veterans "are eminently qualified for, and not necessarily something they think of when they think financial services." Citi has hired 1,000 veterans so far as part of the commitment that it and other large banks have made, and the company plans to hire another 1,000 this year. But Harford laments that a tough economy is getting in the way of her full agenda for the initiative. "We're not hiring as many people as we would like to, and training programs are smaller than they've been," she says.
Kovacevich's Godfather Moment
Nearly four years on, former Wells Fargo CEO Dick Kovacevich remains bitter that the federal government forced even the healthiest large banks to take Troubled Asset Relief Program money in that momentous fall of 2008. "Why didn't I just say no and not accept the TARP money? As my comments were heading in that direction in the meeting, Hank Paulson turned to Fed Chairman Ben Benanke sitting next to him and said, 'Your primary regulator is sitting right here. If you refuse to accept these funds, he will declare you capital deficient Monday morning.'
"'Is this America?' I asked myself," Kovacevich recalled at a June gathering of the Stanford Institute for Economic Policy Research. "This was truly a 'godfather moment.' They made us an offer we couldn't refuse."
Kovacevich, whose comments were reported in the San Francisco Business Times, said he might have objected more strongly if Wells had not been maneuvering at the time to purchase Wachovia.
An ailing Ohio community bank has turned to Louis Dunham, head of a consulting firm called CAMELSolutions, to find some solutions of its own.
First Place Financial, which expects a "material adverse effect" on capital levels as a result of restating its financials, brought Dunham in as CEO on June 27. He replaced Steven Lewis, who was fired in April. Chairman Samuel Roth said Dunham, who previously ran community banks in Illinois and Florida, would be "a great fit" for the $2.8 billion-asset First Place, which launched an internal review centered on its loan-loss accounting.
Bench to Board
We don't know how the folks at Old National Bancorp feel about Chief Justice John Roberts, a divisive figure since his landmark opinion on health care, but they certainly seem to be a fan of Chief Justice Randall Shepard. Shephard, who retired in March after 27 years on the Indiana Supreme Court and was the nation's longest-serving state court chief justice, was named to the board of Old National in July. He is a native Hoosier. The $8.6 billion-asset Old National is the largest financial services holding company based in Indiana.
Hold it, Hold it: David H. Stevens isn't going anywhere. We noted here last month that Stevens was leaving the Mortgage Bankers Association to run SunTrust Mortgage. But just days before he was due to start at SunTrust, Stevens changed his mind, saying he was persuaded during the MBA's annual chairman's conference to stay on as head of the trade group.
If She Were CEO ...
Sallie Krawcheck doesn't run a bank, but anyone wondering how she would do the job can get a pretty good idea from her op-ed in the June issue of the Harvard Business Review.
At Krawcheck's bank, it's likely the top brass would be paid partly in bonds. She says adding a debt component to compensation would curb undue risk-taking meant to juice the stock price. She also thinks managers should be judged less on earnings and more on the basis of customer satisfaction, which she argues is a better performance gauge than quarterly financials, with all of their dips and spikes.
Krawcheck, who was on the short list to be CEO at Bank of America before Brian Moynihan got the job (and eventually ousted her), also proposes that banks rework their dividend policies. She suggests that the payouts be structured as a percentage of profit, which would let stockholders share in the good times and create a natural capital buffer in bad times, even for companies that "failed to foresee the downturn's length and severity," she wrote.
She Bikes, Therefore She Tweets
Florine Luhr, administrator of the First Niagara Bank Foundation, took an eight-day trip in July, but don't call her time away a vacation. For starters, she was pedaling 40 to 60 miles a day on a 400-mile bike trek along the Erie Canal. Plus she was logging it all-sending out Twitter posts and allowing folks to track her progress on a dedicated Facebook page-on behalf of First Niagara, which is based in upstate New York and was the "official bank sponsor" of Parks & Trails New York's 2012 Cycling the Erie Canal tour.
Luhr was enlisted by her employer to be a "cyclist ambassador" for the event, which started in Buffalo on July 8 and attracted about 500 riders. "Did I mention that today is our longest? 60 miles," she tweeted on day two of the ride. But she didn't seem to be complaining. "Beautiful barn dated 1898 in Waterloo NY," read the rest of the tweet, which linked to a pretty photo of building that looked just as she had described it. As we were going to press, Luhr was nearly halfway to the tour's destination point in Albany.