Banking Mid Atlantic (Dec) 2019

DECEMBER 2019

EFFICIENCY

Don’t End Up Backwards And Upside Down

CUBED

Credit Union Finds Growth With A Unique Branch

FUTURE TELLER: HUMAN OR ROBOT? AI Could Mean A New Way Of Frontline Banking

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

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Now with coverage across New Jersey, Pennsylvania and Delaware, bankers across the region turn to our magazine, Banking Mid Atlantic, for essential news, information, and analysis in an evolving marketplace. As a source for thought leadership in the banking industry throughout the mid atlantic, banking executives and managers rely on the magazine for vital information on how to better serve their customers, efficiently run their institutions, and adapt in a transforming industry.

Advertising in Banking Mid Atlantic will give your brand a significant advantage within a competitive market and increase your exposure among thousands of companies that serve the banking industry. Position your message in front of 400+ financial institutions and over 8,000 industry professionals – 90% of whom are executives, vice presidents, and department managers.

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DECEMBER 2019

21 BRANCHES M&T’s $9 Million Investment

4 Letter From The Publisher

5 In the Workplace

Robot vs. Human Teller

8 The Bottom Line

Do You Have Your Priorities Backwards?

10 Customer Service

18 Try To Keep Up

14 Branch Design

21 Branches

16 Personnel

22 Did You See?

How Good Is Your Technology? Your Customers Told Us

Ardent Credit Union Sees Potential Revenue From ‘Cube Branch’

Four Steps To Fix The Broken Employee Review System

Local Professionals Making Their Career Moves

CONTENTS

5

COVER STORY The Evolving Teller

The Thoughts Behind M&T’s $9 Million Investments In Branches

Round up of the latest news from the Banking Mid Atlantic eNewsletter About Banking In New Jersey, Pennsylvania And Delaware

www.ambizmedia.com December 2019 | BANKING MID ATLANTIC

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LE T T E R F RO M T H E P U B LIS H E R

I

Face Front On Your Financial Tech

love technology, except when I hate it.

There’s no question that the Internet has reshaped the world. And a decade ago when cloud-based applications first arrived, so many of us thought this was an insane idea – only to watch it become the dominant method of computing and data storage. Then the iPhone revolutionized mobile “communications,” changing a phone into a way to connect to everything, in almost every way.

Bruce Paul, president of Customer Experience Solutions, has a fascinating article in this issue, looking at just how critical tech is to banking, and to consumers’ expectations of their banks.

If any banking executive wonders whether VINCE VA LVO their investments in resources are well placed by going to IT rather than to sales or finance, it’s an eye-opening read.

Or perhaps bank executives are just like you and me. Because my goal is to never see my banker again. I check my balances on my phone (or PC), transfer money on my phone, download my statements on my computer, and connect my accounts to my investments, monthly bills, credit cards and more. Every bill I can pay online, I do so. I don’t want to have to send out checks, and I don’t want to have to go into a branch to do my banking. If a bank or credit union can’t offer me a wide swath of tech convenience, I don’t want them to be my financial institution. End of story.

A Human Face Or is it?

Sometimes, technology betrays me. A new phone that I haven’t set up right.

Or the wifi is acting up and I can’t access my accounts. Or I just got stupid and can’t remember my password, and my spam blocker is doing too good a job on the “reset password” email from my institution.

That’s when I need a human being to be in the game with me. And, of course, the first line of scrimmage is the teller line. What I don’t want is to find out that those folks don’t know anything about the game. The days when a teller’s main job was to take deposits or pay withdrawals is past. That teller needs to be great at those tasks, but also has to be someone who can help me with my tech issues – getting me better situated with my online account, and maybe with third party apps like Venmo that have become critical add-ons.

The good news for bankers looking to increase business is that when a teller is knowledgeable and helpful on that tech issue, I’m also going to be highly susceptible to helpful suggestions from them about whether I might want to talk to someone about a home equity line, or an investment vehicle, or a credit card.

It’s a lesson that a lot of banks are realizing, and you’ll find an intriguing piece on it elsewhere in this magazine.

It’s not tech or touch. It’s tech and touch. Do both, and it’s not going to be a love/hate relationship – with either technology or with your bank.

STAFF

CEO, PUBLISHER & EDITOR Vincent M. Valvo ASSOCIATE PUBLISHER Beverly Bolnick MANAGING EDITOR Keith Griffin GRAPHIC DESIGN MANAGER Stacy Murray INTERACTIVE DESIGN DIRECTOR Alison Valvo ONLINE CONTENT DIRECTOR Navindra Persaud OPERATIONS MANAGER Kurt Schenher MARKETING & EVENT ASSOCIATE Melissa Pianin

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: Light Field Studios

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

VINCENT M. VALVO CEO, Publisher & Editor

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BANKING MID ATLANTIC | December 2019

West Hartford, CT 06117

I N T H E WOR K PL ACE

THE EVOLVING TELLER

In The Digital Era, The Bank Teller’s Role Shifts And Expands

By CANDACE TALMADGE, Special To Banking Mid Atlantic

W

ill the bank teller in the digital age ultimately be a sophisticated robot?

That’s where the industry is heading, according to a PwC financial services technology trends report.

For now, however, the shifting role of the human bank teller embodies the profound changes that digitization is bringing to banks of all sizes. The initial advent of online account access and then mobile banking have upended the teller’s role right along with the entire industry.

With smart phones, “the bank is now in the palm of their (customers’) hands,” pointed out Honey Shelton, president of InterAction Training Systems of Humble, Texas. Shelton has been training tellers and other bank employees since 1983.

Changes in the teller’s role have happened faster in banks serving large urban markets like New York City than smaller or rural markets, said Jim Burson, managing director of financial services industry consulting and research firm Cornerstone Advisors. But, Shelton added, community banks in smaller rural markets are now scrambling to catch up.

Reduced Opportunities Digitization is reducing the opportunities for employment as a teller and prompting banks to close bank branches. The U.S. Bureau of Labor Statistics forecasts a 12 percent drop in the numbers of U.S. teller jobs between 2018 and 2028. And banks were operating 8.6 percent fewer branches at the close of 2018 than at the end of 2013, the FDIC reports.

But fewer tellers in fewer branches is by no means the whole story. The role of the teller is evolving. Different institutions use varying titles for the new role, such as universal banker December 2019 | BANKING MID ATLANTIC

5

The U.S. Bureau of Labor Statistics forecasts a 12 percent drop in the numbers of U.S. teller jobs between 2018 and 2028. or branch associate. But there is a common thread. Tellers are now doing a lot more for customers than taking in cash deposits and handing out withdrawals.

“The complexity of the teller’s job has increased significantly,” said Christopher Maher, chairman/CEO of OceanFirst Bank, which retrained more than 500 frontline employees in about 65 branches. Those who become certified as a universal banker get a pay boost.

Training is key, Shelton emphasized.

Universal bankers or branch associates may be called on to handle something complicated like opening a partnership account, while managers now chip in to take deposits. Shelton said that since such tasks are not routine, the bank should have detailed instructions

readily available to the branch associate or universal banker to consult in such instances.

More Certification & Training Shelton also noted that the expanded teller role also involves keeping a close watch for signs of fraud. Then there is assisting customers with technology snafus. OceanFirst also certifies tellers as digital bankers capable of guiding customers through issues with popular third-party financial apps like Venmo, Maher said.

Tellers now serve customers remotely via video from centralized locations. OceanFirst closed or consolidated roughly 40 branches over the past three years, and invested some of the savings into training and customer care centers, Maher

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BANKING MID ATLANTIC | December 2019

explained. A lot of banks are moving tellers to centralized offices, Shelton said.

Tomkins Mahopac Bank, headquartered in Putnam County, N.Y., began training its tellers to become branch associates three years ago, said Carol Schmitz, senior vice president/ community banking manager.

Tomkins Mahopac takes advantage of digital tools to like texts and emails to keep customers informed. It uses voice calls from branch associates to talk to them about their financial needs and discuss products that can help them. Most Tomkins Mahopac tellers welcomed the new career opportunities, but a few found it hard to adapt to relationship phone calls, Schmitz added.

And the teller’s digital age role is all about relationships. So much so that the physical barrier of the line is going away, Burson said. Instead, tellers are morphing into concierges and greeters who circulate among customers, talking with them, looking for opportunities to nurture relationships and watching for signs of fraud.

Patriot Bank N.A., Stamford, Connecticut, began the process of redesigning its nine branches and reshaping teller roles two years ago, according to Fred Staudmyer, the bank’s executive vice president/chief administrative officer.

The first step was to introduce interactive teller machines (ITMs), which offer live tellers via video at its branches plus at Westfield Trumbull shopping center in Trumbull, Connecticut, and at Housatonic Community College in Bridgeport, Connecticut. These touch screen ITMs enable customers to conduct virtually all the business they could transact at a teller counter inside a branch.

The next step was to test cash recyclers in its branches to manage deposits and withdrawals more efficiently. These machines free up

Tellers now need a set of skills to enhance the customer experience.

Tellers and managers are trained not to sell customers what they don’t need, but instead to look for ways to make the customer experience better. That way of thinking “can be very foreign to a bank.”

– Honey Shelton, InterAction Training Systems teller time for higher value activities like cross sales, opening accounts, and telemarketing.

Potential In Visitors Indeed, those fewer and less frequent branch customer visits still hold a lot potential for banks that branch associates or universal bankers are now tasked with uncovering. The Federal Reserve’s latest triennial Survey of Consumer Finances showed that those who still visit bank branches the most tend to be older, wealthier, and selfemployed.

“This makes the teller a really valuable employee,” Shelton pointed out.

One challenge for the industry in the changing role of the teller is recruiting, Burson said. The skills needed for new teller role are much greater than the traditional entry level position. Banks now must find, attract, and retain the right kind of talent to fill the roles of universal banker or branch associate.

Tellers now need “a set of skills to enhance the customer experience,” said Shelton. She trains tellers and managers not to sell customers what they don’t need, but instead to look for ways to make the customer experience better. That way of thinking “can be very foreign to a bank,” she added.

In order to be truly successful, branch associates or universal bankers

also need a manager to model the behavior the bank wants and to coach them continuously, Shelton said.

Patriot Bank retrained and renamed its tellers and head tellers as service associates and senior service associates, Staudmyer added. Patriot Bank senior service associates have been trained to open accounts, send ACHs and wires, and conduct outbound telemarketing.

Several of Patriot Bank’s senior service associates have enhanced their careers with training and are now working in its banking center, deposit operations, and SBA loan operations.

Taking on new responsibilities creates upward mobility and improved performance, leading to pay increases.

December 2019 | BANKING MID ATLANTIC

7

THE BOTTOM LINE

Upside Down Thinking On Efficiency Do You Have Your Priorities Backwards?

M

By DAVID CARLSON, Special To Banking Mid Atlantic

any financial institution executives spend considerable time thinking about strategies to improve efficiency in order to improve overall profitability. The efficiency ratio is the ratio of non-interest expenses (less amortization of intangible assets) to net interest income and non-interest income, so it is effectively a measure of what you spend compared to what you make. The very name – “efficiency ratio” – makes us think about how efficient we are with those precious income dollars. If a financial institution has a high efficiency ratio, they are simply spending too much of what they make… right? That is exactly what the name implies (emphasis on the spending side of the equation). But this is just a ratio of two numbers, and as we all know, there are two ways to bring the ratio down – reduce costs or increase revenues.

The focus across industry press and conference best practices is generally aimed at strategies to cut expenses – using technology, looking at staffing levels, increasing productivity, etc.

Although this advice is sound, what happens when a financial institution has already cut what can be cut AND it is still struggling with efficiency? It is sometimes difficult to save your way to prosperity.

For many financial institutions, the focus should also be on the bottom portion of the equation – increasing revenues. Let’s look at an institution that has $500 million in assets, a good return at 1 percent ROA, and a reasonable efficiency ratio of 60 percent.

Their key metrics would look something like this. (See Exhibit 1.)

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BANKING MID ATLANTIC | December 2019

Now let’s assume the FI can improve its efficiency ratio by 5 percent through revenue increase or expense reduction.

(See Exhibit 2.)

It shouldn’t be surprising that increasing revenues provides better performance even though this sometimes seems like a counterintuitive approach. Because many financial institutions need to increase investments for growth in order to significantly grow their revenues, thereby increasing the expense side of the equation, and because of their excess capacity, this will actually make them more efficient over time. Many financial institutions have cut expenses EXHIBIT 1:

EXHIBIT 2:

almost to the bone and can’t materially improve their efficiency ratio by further reducing costs. They need to take a step back and realize some fundamental business dynamics that are often ignored in our industry.

Most community financial institutions still have tremendous excess capacity, meaning they could serve significantly more customers without significantly increasing expenses. The answer to improving the efficiency ratio is to fill excess capacity with brand new profitable customers.

How do other businesses look at the issue of excess capacity – for example a manufacturing company?

· The facility is running at 50 percent of the capacity it was built to produce; · The factory has done everything it can to be as efficient as possible – evaluate staffing levels, implement technology solutions, etc.; and · Management’s major goals and objectives are still focused on improving profitability by further evaluating already efficient processes and selling more to current customers.

Given the excess capacity at the manufacturing company, wouldn’t it also make sense to evaluate if more widgets can be run through the facility?

Would the market support providing more products to more people in order to increase net income without substantially increasing expenses?

The manufacturing company analogy is very similar to the situation being faced by community financial institutions. They have branches currently attracting 30 percent - 50 percent of the new customers they were

built to serve each year and it is getting worse as transaction volume continues to decline in branches. Most financial institutions have used technology and staff reductions to become more efficient; however, they still spend much of their time, effort and energy focusing on cost reductions and additional efficiency enhancement.

When a community financial institution starts welcoming significantly more new customers per year, fixed costs do not substantially change – no new branches have been built, no additional employees have been hired. Actual data from hundreds of community financial institutions illustrates the impact on actual expenses is just the marginal costs – generally an additional $30 - $50 per account per year (even if we must mail a paper statement). Conversely, the same data base shows the average annual contribution of each new account per year is between $250 - $350.

When comparing clients that have embraced this strategy to the overall industry over a three-year period of time (2014 to 2017), their improvement

in efficiency ratio was 63 percent better. This has been accomplished by significantly increasing the number of new customers coming in the front doors of existing branches.

There is only so much blood in a turnip. Controlling costs, embracing technology to reduce process costs and evaluating staffing are all things financial institutions should be doing; however, if they have already become very efficient in these areas, the focus must shift to driving revenue. Most financial institutions have tremendous excess capacity in their existing branches today. The solution is to start filling them up.

David Carlson is a senior executive vice president at Haberfeld, a datadriven consulting firm. He can be reached at 402-3233600 or dcarlson@ haberfeld.com.

December 2019 | BANKING MID ATLANTIC

9

C USTOME R S ERVICE

How Good Is Your Technology?

Your Customers Told Us.

By BRUCE PAUL, Special to Banking Mid Atlantic

The recent Banking Benchmarks collected 644,898 reviews from consumers and businesses across Pennsylvania and New Jersey and revealed some interesting and surprising findings about how they use and view banking technology, and how gender, age and income drive that usage.

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BANKING MID ATLANTIC | December 2019

> Does better technology and tools really help

retain customers?

Absolutely. The analysis across every single bank in the two states show that consumers and businesses that use and like their bank’s technology are 26 percent more likely to remain loyal and to increase their share of wallet with the bank. On the flip side, bad, out-ofdate technology increases the likelihood of a customer leaving by 202 percent!

Fortunately, most banks are doing a good job since only 10 percent of customers think the technology at their bank is subpar. (See the case study for 2 examples) Do you know how your customers rate your technology?

> Does better technology and tools really attract

new customers?

This answer is more complicated. Most consumers do say that technology is important in choosing a new bank. That much is clear. But what is less clear, in the minds of those same consumers, is which banks actually have the best technology. The latest Benchmark results show that 72 percent think most banks and credit unions have about the same caliber technology and tools as every other bank. Out of the thousands of institutions we cover, the vast majority were rated average in technology by prospects (potential customers). We asked prospects how good or bad they thought the technology would be at other places they do not yet bank at, and only 32 banks and credit unions in the Mid Atlantic were seen and probably delivering low quality technology. While this is bad news for the largest banks that have spent hundreds of millions of dollars developing their tools and even more money marketing those tools, it is good news for many smaller institutions that are getting the benefit of the doubt from prospects.

Better than average 36%

Average 54%

Worse than average 10%

> Does bigger equal better in technology?

When consumers are asked to rank banks they have not used, they are slightly more likely to assume that the larger banks have better technology and tools than smaller ones. However, this gap has been narrowing over the past five to six years as more and more customers tell us that they assume all institutions have basically the same level of online and mobile services.

In fact, when we analyzed the latest Benchmark results for each individual town across New Jersey and Pennsylvania (Maryland is next), we found that in over 80 percent of the towns, there was at least one community bank ranked in the top three in technology by potential customers.

When consumers and businesses are asked to rate their own bank, it is a different story. As you can see from the regional rankings listed here, smaller community banks are rated as high or higher than the largest banks over 55 percent of the time. It also shows that some banks are inconsistent in different areas of their footprint: they are rated highly by customers in one area but lower by customers in another area. This is usually due to inconsistent training (see case study).

This serves to remind all banks that while the biggest banks might have an advantage in spending and image, community banks can certainly hold their own.

> The times are changing

Mid Atlantic banks have to ensure that they are ready for the continuing shift away from the branch toward technology. More than two-thirds of Pennsylvania and New Jersey customers say they will increase their usage of online and mobile banking tools in the coming year.

For high income earners (earning over $250,000 per year), that increases to 71 percent, and for Millennials, that goes up to 74 percent.

> Millennials are changing the landscape, not

demolishing it Many bankers we meet with believe that the younger generation, the Millennials, are causing the branch to go the way of the dinosaur. And many others say that the only reason to keep branches open is to accommodate a handful of elderly customers who just want to come in for a chat. In Pennsylvania and New Jersey at least, both notions appear to be overblown. Across the region, less than half of Baby Boomers say they prefer using a branch or the phone over online and mobile. Among Millennials, about a quarter say they actually prefer the branch or phone versus online and mobile. Keep in mind that this does vary quite a bit from area to area, so it is very important to understand the dynamics in your particular trade area.

> Gender Gap

In a reversal of roles in years past, women in the Mid Atlantic are now almost 20 percent more likely than men to prefer online/mobile to branch/phone.

December 2019 | BANKING MID ATLANTIC

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Women are also going to increase their use of online and mobile faster, further widening this technological gender gap. This gender disparity is playing out in some interesting ways, with a few Pennsylvania and New Jersey and Maryland banks ranking much higher among women than men. With the financial and tech savvy of women compared to men, this could be a very lucrative approach for the banks with the right image.

> The Threat of Non Banks

Many articles have proclaimed the banking industry as doomed in the face of a fintech revolution, with companies like Apple, Google, Amazon and others supposedly poised to relegate the hapless old bank to the history books alongside the telegraph office and the general store. In the Mid Atlantic, non-banking technology has made some inroads, with 31 percent of customers currently using some non-banks to handle their money. While that is not a surprise to many, what might be a surprise is that Millennials are the least likely to use non-banks and Baby Boomers are the most like to do so. The reason lies not in age, but in wealth. New England residents with incomes over $100,000 are much more likely to have diversified their financial partners than their less well-off counterparts.

Since we are continuously interviewing so many

Banking Benchmarks® Spcial Analysis

Would You Consider Banking With ...

Paypal

Amazon

Google

Apple

Gateway New Jersey Bergen, Hudson, Passaic 1. Chase 2. ConnectOne 3. TD 4. Capital One 5. Columbia

Northern New Jersey Essex, Morris, Sussex, Union, Warren 1. Chase 2. Capital One 3. TD 4. BofA 5. Citi

Central New Jersey Hunterdon, Mercer, Middlesex, Monmouth, Ocean, Somerset 1. Chase 2. Capital One 3. Manasquan 4. TD 5. Two River

Southern New Jersey Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, Salem 1. Century SB 2. Republic 3. TD 4. PNC 5. Franklin Fed

households and businesses about their banking lives, we often take the opportunity to probe deeper for our subscribers into the issues they care about. A large number of them have been asking about non-banks lately, so we took it upon ourselves to ask if they would ever consider banking with some high profile non-banks that are thinking of invading the banking space. The results are below. As you can see, PayPal is in the best position, while Facebook is even less considered than Starbucks.

U.S. Postal Service Walmart

Starbucks

Facebook 0%

20%

©2019 Customer Experience Solutions, LLC. All rights reserved.

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Technology & Tools

BANKING MID ATLANTIC | December 2019

40%

We also saw a big variation by geography.

• In Philadelphia, households and businesses were much less trusting of these companies to handle their banking • In New Jersey, they were much more likely to trust Google and Apple

• Across Central Pennsylvania, people were much more likely than elsewhere to trust the Postal Service to deliver banking (rain or shine!)

We also saw some interesting differences by gender • Men are more likely to trust cyberspace-based entities like PayPal, Amazon and especially Facebook with their banking • Women are much more likely to trust entities with a physical presence like the Postal Service, Walmart and even Starbucks

> Banking Choice Awards

The Banking Choice Awards will be awarded again in 2020 and the rankings below are a mid-year preview of those results. The ratings and rankings are based upon interviews we conduct with each institutions’ own customers. The rankings are likely to change before the Awards as some institutions roll out new services and as others (regrettably) stumble. Stay tuned!

> In Conclusion

Technology and tools really can make a difference in customers’ experience, and usually for the better.

It is important to know how your customers rate your technology—is it making their lives better or causing hassle? Just as important is to know how those ratings compare to your local competition, so you know before you fall hopelessly behind. Once you have gotten the objective feedback from customers, then you can plan how to fix it and prevent attrition, or to leverage it to increase loyalty and gain new business.

Bruce Paul is the founder of the Pennsylvania, MD, New Jersey Banking Benchmarks, and leads the Banking CXlign team at the Rivel Research Group.

CASE STUDY: Two Community Banks recently updated their online banking services within a few months of one another in the middle of last year. Both used the same core provider and upgraded to the same online platform. Before the transition, both of their respective customer bases rated their technology very poorly and at both banks the online and mobile usage was 20-25 percent behind local competitors. The percentage of customers at each bank that did not know how to use the tools was between 45 and 50 percent.

A year later, the outcomes have been very different.

For Bank A: • A 17 percent increase in the number of their customers using the online tools • Customers now rate the bank’s technology 7 percent above average • Loyalty and cross sell has started to increase • Average cost-to-serve has just started to drop • They got everything they hoped from such a big investment

For Bank B, the transition has been tough: • Online usage has actually dropped 3 percent among customes • Loyalty has dropped slightly • Complaints have soared • So far, the net result of the transition has been a negative So why such different outcomes despite moving to the exact same tools? Their customers are very clear (we interview thousands of them as part of our Banking Benchmarks): the training they received was vastly different.

At Bank A, one year after transition, 9 percent of the customers say the tools are hard to use and 12 percent said they still needed training to use the new tools. At Bank B, it is 59 percent and 62 percent, respectively.

Bank B leadership had assumed that the tools would be intuitive enough that their customers would figure them out and did not have a structured training program for their customers—or their staff. During our customer interviews, we hear comments like: “how am I supposed to be able to use the online banking if the staff at the branch don’t know how?” The clear lesson is that the training is at least as important as the tools themselves.

December 2019 | BANKING MID ATLANTIC

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B R A N C H D ES IG N

Ardent Credit Union Sees Potential Revenue From ‘Cube Branch’ Concept Could Be Sold To Other Banks; Membership Increased At First Use

By CANDACE TALMADGE, Special To Banking Mid Atlantic Photography by JEFFREY TOTARO

M

ove over, docs in a box. A Pennsylvania credit union has patented a bank in a box. Customers and employees have reacted positively to the microbranch and even mall developers have expressed interest in it.

“We wanted it to look like a piece of artwork,” said Rob Werner, Rob Werner president and CEO of Ardent Credit Union, based in Philadelphia.

At present Ardent is operating just one 240-square-foot “cube branch” inside the atrium of the GlaxoSmithKline consumer products division building in Collegeville. The cube is 10 feet tall, 14 feet wide, and 14 feet long, and is made out of plastic laminate and solid surface materials, with a steel and plywood substructure.

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BANKING MID ATLANTIC | December 2019

Inside The Cube The cube has a video ATM in its center, a consultation office, and a teller line. It is staffed by two employees and can fit a few customers at a time. And the 13th largest credit union in the Keystone State has ambitious plans for its cube, which Werner said contains a great deal of valuable intellectual property. Hence the patent on the design.

With 35,000 members and more than $700 million in assets, Ardent operates eight branches, including the cube, in five Pennsylvania counties: Philadelphia, Montgomery, Delaware, Bucks and Chester.

One of the drivers behind the development of the cube branch was the renovation of the GlaxoSmithKline building in Collegeville. Ardent was founded in 1977 by the employees of what was then SmithKline as a companybased credit union, but has since opened membership to the public in the counties where it operates.

The other impetus in developing the cube was Werner and Ardent chief operating officer Wade Bennett. After Werner joined the credit union in 2013, the two began thinking about alternatives to the typical brick-and-mortar branch model.

Made From Necessity Meanwhile, GlaxoSmithKline wanted to move the existing Ardent branch out of a lower floor and into the building’s enormous atrium. But the company did not want to have to make any construction modifications to the atrium in order to accommodate the branch. That called for something that was pretty much selfcontained.

The construction constraint was a true design poser, according to Stephen Beacham, principal director of design, interiors for the Washington, D.C. office of HOK. The global architectural design firm was working with GlaxoSmithKline on designs to modernize its offices.

HOK’s architects and designers began brainstorming with Werner and Bennett, all of them trying to come up with a cost-effective branch alternative that met technology needs while still offering customers personal interaction with branch employees.

HOK even assigned two staffers, senior designer Candace Todd and Shawn Brennan, project architect, to the task full time. Beacham, Bruce Arthur, senior project manager, and Todd Carll, project manager, rounded out the HOK team on the case.

Eureka!

Their “Eureka” moment arrived in 2016, when they realized that the foundation of what became the cube branch could be the same system of rails and overhead guides used in high density filing systems. These systems are designed to hold huge amounts of documents in a compressed space.

“Once you have the compressed filing system structure, you can build anything on it,” Beacham explained. As they had intended, they ended up with a self-contained unit that can be placed anywhere as a long as it can be hooked up to a power supply.

Beacham said the cube branch consists of several

components. They include the tracks and the platform, a fixed arch to house ATM unit, and two sides that open and close with the touch of a button. It also contains a vault.

The cube has laminated and tempered glass at both ends to let in natural light from the atrium. The sides open like wings. One side is for the consultation office and the other provides the space for the teller line and the ATM. HOK worked with Ardent’s branding and graphics team to decorate the space in Ardent’s company colors and logo.

Future Concerns Because the first cube branch is located inside an access restricted environment, Werner said next-generation cube branches that sit in public spaces like a mall or unsecured office buildings will contain additional security features.

Werner said the current cube branch is staffed by two employees who can handle pretty much the same types of transactions as a regular or flagship branch. But the cube costs just a fraction of the roughly $2 million to $2.5 million needed to build a 2,000-square-foot flagship branch and even less than the $250,000 or more needed to retrofit a retail location.

The first month after the cube branch opened in September, it quadrupled the amount of new memberships over the number of new members typically added in that timeframe, Werner added.

Tackling Digital’s Effect As digital banking reduces the amount of in-person branch visits that customers make, Werner said the cube branch complements Ardent’s branch plan and gives the credit union a unique degree of flexibility to expand its footprint. The credit union plans to open three to five additional cube branches over the next couple of years.

Ardent also is looking to sell the cube concept to other companies. With margins continuing to shrink in Ardent’s core business, outside sales of cube branches could help maintain revenues while helping reduce the credit union’s own operating costs.

December 2019 | BANKING MID ATLANTIC

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P E RS O NNEL

I

Four Steps To Fix The Broken Employee Review System

t’s October, and if your business works on a calendar year cycle, it’s time. Your boss seems a bit busier than normal. Maybe even a little stressed. More time behind closed doors in the office. Lots of “Hey, let’s get these done before the end of the month” shouts down the hallway. Then, you realize. You remember what all this kerfuffle is about. It’s time for performance reviews and you immediately get a little sick to your stomach.

You recall a discussion with some consultants on the subject. “Only 2 in 10 employees strongly agree that their performance is managed in a way that motivates them to do outstanding work.” Only “29 percent of employees strongly agree that the performance reviews they receive are fair, and 26 percent strongly agree they are accurate” (Gallup, 2017). Well, that’s not good.

But if it’s any consolation, your boss doesn’t like it any better than you do. “More than 90 percent of managers, employees, and human resource (HR) heads feel that their performance management processes fail to deliver the results they expected, and many view their current processes as ineffective and/or inaccurate (Corporate Leadership Council, 2012).” Wow. If that weren’t bad enough, that same 2012 report suggests that “managers and employees spend about 210 and 40 hours, respectively, per year on performance appraisal and performance management activities.” I’d like to have that time back.

IF BROKEN, WHY USE IT?

It’s a debate raging throughout business and a question leaders are asking themselves, “If this system is as broken as it seems to be, why don’t we abandon it all together and get some of that time back?” We have enough to do.

And this is precisely what a number of big organizations have chosen to do, including Eli Lilly, Adobe, and Gap, Inc. So why are we still doing this?

Sounds like they might be on to something.

Not so fast.

Even without a formal system, organizations will continue to assess and rank employees, but now with a less structured, more intuition-based approach.

How will my organization determine compensation levels when “over 90 percent of companies tie pay to performance” and “82 percent link individual

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performance to compensation (Mercer, 2013).” Are they just going to wing it?

Most businesses we encounter conduct some form of annual evaluation and link pay to review outcomes. But, only around 5 percent of those organizations feel like they have the system right – that the system fulfills its purpose and guides individuals along a growth path.

So – review systems appear broken and we spend significant manpower on their management. Yet, we need them. What should we do?

FOCUS YOUR ENERGIES

We believe there are four areas where organizations should apply some energies to get a better return on that 210-hour annual investment.

1. Make the review mirror those competencies your organization needs to nurture and reward.

All too often, we find review templates that have been pulled from some HR software system or brought along from a former organization. Stop it.

Your organization’s culture exercises a specific brand of leadership. You grow leaders in a way that’s unique from every other organization on the planet. Think through those competencies (your leadership brand) and what’s required to: (a) get in the door, (b) be a successful employee, (c) stand out among your peers for recognition and promotion (informal leadership), and (d) formally execute leadership and management responsibilities from the most junior to your executives.

2. Your performance review system should mirror that brand.

The performance review system should tie directly to individual development plans (and those should tie to your organization’s succession plan). In those organizations we work with, we also find weak or overly standardized individual development plans (IDP). In fact, organizations openly struggle with performance reviews for long-standing, stable employees. “What do I say this year that I didn’t say last year?” Reviews, yearto-year, aren’t much beyond a cut and paste exercise.

Struggling with engagement much?

Remember, of all the pros and cons around

Only “29 percent of employees strongly agree that the performance reviews they receive are fair, and 26 percent strongly agree they are accurate.”

– Gallup, 2017

performance reviews, this is the one time annually (or more frequently if you’re lucky) that you and your boss are supposed to have a one-on-one discussion about how you’re doing and what’s next. If that conversation has gotten stale, so have you.

The templates our IDPs come in should be common, but what’s in that document should be uniquely tailored to your progression – from wherever you are to wherever the organization is growing you to be. Even if you’ve plateaued, position-wise, at work, the IDP can speak to selfdevelopment, time management, emotional intelligence, or communications goals. We all need work there.

But even better, that progression we’re talking about should link directly to your organization’s succession plan – and we’re not talking about what happens if the boss gets hit by a bus. Rather, your business’ succession and performance management should encompass a wider group of employees at various seniority levels who represent “single points of human failure.” Where there’s a plan for everyone’s succession (read growth) in your organization, you have the makings of a tailored IDP which becomes that thing on which your performance review is based.

Frankly, if that’s how you’re developing subordinate leaders to review performance and offer feedback, your system is going to continue to struggle. Spend the time teaching them what, when, where, and how to do this right – your way. Your employees will be better, they’ll be better, and the system becomes worth your time again.

4. Lastly, regularly check on how recurring performance reviews and the IDP is being managed.

Quarterly updates to augment the annual, formal review?

Sure. I’ll bet they aren’t happening as regularly as you think they are, and if they’re not – you’re violating a cardinal rule for reviews – never, ever surprise anyone.

We know. There are no lightning bolts here. Good, oldfashioned, common sense leadership. But you know what they say about common sense – it’s not so common. Want some help? It’s out there.

3. Teach your leaders to counsel and coach.

When we promote someone to a formal leadership position and make them responsible for developing others, they all too often receive a “get out there and coach ‘em up” admonition from the boss. Boo.

Stephen A. Ingalls

Guy Hatch

Stephen A. Ingalls is president and CEO and Guy Hatch is director of business development at Catalyzer, which specializes in leadership development. More information is available at TeamCatalyzer.com.

December 2019 | BANKING MID ATLANTIC

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MID TIC ATLAN

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

PNC Names Hutchinson Top Delaware Exec

PNC Bank has promoted Jim Hutchinson to the position of Delaware Market Executive. He succeeds Bruce Colburn, who retired from the role.

Hutchinson has more than three decades of financial industry experience.

In addition to serving as market executive, Hutchinson is assuming responsibilities as wealth director for the market.

As Market Executive, Hutchinson will lead PNC’s relationships with the local Jim Hutchinson business community and community organizations, along with overseeing business development and relationship management for the market’s Wealth Management team.

Hutchinson began his PNC career in 2001 as an investment advisor in PNC’s Wilmington headquarters location. In 2013, he took on leadership responsibilities as team director for PNC’s newly formed wealth management group based in Blue Bell, PA. During the past year, he has led PNC’s Center City Philadelphia team as a wealth director.

Hutchinson received his bachelor’s degree in accounting from the Pennsylvania State University, a master’s degree in finance from Temple University, and a Juris Doctor from The Delaware Law School-Widener University.

Levenson Will Assume Role Of Board Chair At WSFS Financial

Effective Jan. 1, 2020, Rodger Levenson will assume the role of chairman of the board of directors of WSFS Financial Corporation, the parent company of WSFS Bank, in addition to his role as president and CEO. Mark A. Turner will step aside from his role as Executive Chairman and remain on the Board as a Director.

Lead Independent Director Eleuthère I. du Pont said, “Mark assumed the role of executive chairman on January 1, Rodger Levenson 2019, amidst WSFS’ efforts to close on the acquisition and integration of Beneficial Bank with several critical milestones ahead. With those milestones achieved and understanding Mark’s previously disclosed desire to explore and take on new challenges, the board initiated the next phase of our succession plan by unanimously selecting Rodger as our

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chairman and Mark stepping into a director role.”

Levenson has more than 33 years of local banking experience. He joined WSFS in 2006 and assumed the role of president and CEO on January 1, 2019. Since that time, Levenson led the successful integration of Beneficial to position WSFS as the only bank with distinct market advantages, including the size and scale to compete with banks of all sizes, a full-service product suite, regional market knowledge and local decision making. An active member of Greater Philadelphia and Delaware communities, Levenson’s community service spans memberships on several boards of directors, including The Chamber of Commerce for Greater Philadelphia, Delaware State Chamber of Commerce, Delaware Business Roundtable and the United Way of Delaware.

In his additional role as chairman, Levenson will work closely with du Pont, lead independent director of the board.

Turner will serve as a board director for WSFS, contributing his near 30 years of banking knowledge and deep experience in the financial services sector. He is stepping aside as executive chair as part of the continuing leadership transition at WSFS and to co-found and lead a new venture to develop a technology platform providing financial products and services for millennials.

Lakeland Bank Promotes Ruvo and Rivera

Thomas J. Shara, President and CEO of Lakeland Bank announced the following promotions.

Theresa Ruvo has been promoted to senior vice president, branch administrator based in Oak Ridge, N.J. In this role, Ruvo will be responsible for Theresa Ruvo Jason Rivera the overall operations, policy and procedures for the branch network. She began her career with Lakeland Bank in 2014 as assistant vice president, assistant branch administrator and in 2015, she was promoted to vice president.

Prior to joining the bank, Ruvo was director of training at Kearny in Fairfield, N.J. and a regional manager at Provident Bank in Bloomfield, N.J. She earned a Bachelor of Science degree from Kean University and is a graduate of the American Institute of Banking and the inaugural Lakeland

Bank LEAD class. Ruvo is a eucharistic minister for St. Pius X Church. She resides in Montville, N.J. Jason Rivera has been promoted to vice president, business banking officer based in Oak Ridge, N.J. Rivera will be responsible for developing small business lending opportunities. With more than 10 years of industry experience, he was most recently a branch operations manager of the Vernon office.

Prior to that, he was an assistant vice president, branch manager at Highlands State Bank prior to the acquisition earlier this year. He earned an associate’s degree in business management from Sussex County Community College. Rivera resides in Wantage, N.J.

The Bancorp Appoints Two New Members To Board The Bancorp Inc. announces the addition of Daniela Mielke and Stephanie Mudick to its board of directors.

The wide range of experiences, competencies and perspectives that they both bring to Daniela Mielke Stephanie Mudick the board will offer enhanced support for The Bancorp’s vision and strategic agenda.

Mielke has nearly 30 years of experience in the financial services industry and has held numerous leadership roles. She is currently the North American CEO of RS2 Inc., a leading provider of payment processing services in Europe and Asia Pacific.

Mudick has had a long-standing career in the financial services industry, most recently having spent 11 years as executive vice president at JPMorgan Chase and Co. During her tenure, she served as head of regulatory strategy, where she managed the global regulatory agenda for the firm across all of its businesses and products.

Mudick also served Citigroup, Inc. in various roles providing a wide array of banking, lending, insurance and investment services to individual and small business consumers in over 50 countries, with $12 billion in earnings, and as general counsel of the firm.

ESSA Bank & Trust Adds To Information Technology Team

ESSA Bank & Trust, based in Stroudsburg, Pennsylvania, has expanded its Information Technology Team in the Stroudsburg market.

Ronald Gaddy has joined ESSA as a network engineer.

Gaddy has over 20 years of experience in business analytics and project management. He has served as a senior applications developer, production services supervisor, and systems analyst.

Alexandros Psitos has joined ESSA as a network engineer.

Psitos is a recent graduate of The Pennsylvania State University where he received his degree in Information Sciences and Technology. Prior to joining ESSA, he completed several internships where he was responsible for a team of intern developers.

Jamespeter Hinkle has joined ESSA as a technology services specialist. Hinkle has over 13 years of experience across multiple information technology disciplines and holds several industry leading certifications. Most recently, he served as senior IT specialist for an IT consulting firm and a Level 3 support specialist for a regional educational institution.

The three will be based out of the bank’s corporate office in Stroudsburg, reporting to Brian W. Massie, information & technology manager.

WSFS Bank Welcomes Dutton As Director Of Community Reinvestment

Pennsylvania native Ron Dutton has joined WSFS Bank as senior vice president and director of community reinvestment with oversight of the bank’s Community Reinvestment Act program.

In this role, Dutton will interact with community leaders and government officials. He will represent WSFS in civic, community, and other functions to enhance the bank’s partnerships and commitment to all residents and entities within the neighborhoods it serves.

Ron Dutton Dutton joins WSFS Bank following the retirement of former WSFS Associate and Director of Community Reinvestment Terri Hasson.

Dutton’s career includes nearly 20 years with Wells Fargo, where he held numerous positions in government guaranteed lending, community reinvestment, business banking, and government and institutional banking. He also has significant experience in commercial banking, CRA risk and compliance, relationship management, reputation risk management, credit, and public and private sector finance.

He holds a B.S. in Business Administration from the Cheyney University of Pa., and is an Army ROTC graduate from Widener University in Chester, Pa. Active in his community, he serves on the board of the African American Chamber of Commerce of Pennsylvania, New Jersey, and Delaware, and the loan committee for True Access Capital. He resides in Montgomery County, Pa.

Caruso Joins NAGGL

WSFS Bank announced that Candice Caruso, vice president, director of government guaranteed lending, has joined the National Association of Government Guaranteed Lenders (NAGGL), which provides a unified voice for over 800 banks, credit unions, and non-depository lenders who participate in 7(a) business loan programs backed by the U.S. Small Business Administration (SBA).

Caruso, who joined WSFS Bank in fall 2018 to lead the bank’s SBA lending program, is a longtime franchise finance executive and small business funding expert. For Caruso, joining NAGGL means WSFS Bank’s government-guaranteed lenders and its service team will remain well informed and prepared for political changes and new rules that could impact how the bank provides SBA loans to Customers.

NAGGL is an association that aims to promote the 7(a) program. This program allows for the avocation and representation of small businesses in government legislation to receive stable or increased capital.

December 2019 | BANKING MID ATLANTIC

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Marsh Appointed To Community Bankers Council

William C. Marsh was recently appointed to serve on the American Bankers Association’s (ABA) Community Bankers Council for the 2019-2020 year.

Marsh is chairman of the board, president and CEO at The Farmers National Bank of Emlenton.

The Community Bankers Council (CBC) identifies community bank William C. Marsh priorities and represents community banking in the ABA’s policy-making process. The ABA recognizes the CBC as the focal point for providing world class solutions, leadership and advocacy for the nation’s community banks.

The CBC consists of community bank presidents and CEOs from across the nation focusing on government relation issues, banking trends and competitive priorities. Council members actively participate at the state and local level to ensure Council messages reach the widest possible audiences and promote the value of ABA membership.

Marsh currently serves on the board of directors of the Federal Home Loan Bank of Pittsburgh, is a past board chairman of the Pennsylvania Bankers Association and was recently appointed to serve on the Board of the Pennsylvania Association of Community Bankers. Marsh is a former member

for the Federal Reserve Bank of Cleveland’s Community Depository Institutions Advisory Council, past director for the Community Development Corporation of Butler County and past member of the Butler County Community College Foundation’s Capital Campaign Steering Committee.

Hopkins Joins Columbia Bank

Columbia Bank announced new leadership for its commercial and industrial lending business. Therone Hopkins will serve as vice president, commercial lender III for Columbia Bank’s Central New Jersey Region.

Prior to joining the Fair Lawn-based financial institution, Hopkins most recently served as vice president, senior business manager at Capital One Bank, according to a Columbia news release.

According to Columbia President and Therone Hopkins CEO Thomas Kemly, Hopkins brings nearly 12 years of experience in the field to his new role. “We are excited to have Mr. Hopkins join the Columbia Bank Commercial Lending team,” Kemly said in a prepared statement. “Therone … will help to expand our commercial lending presence.”

Hopkins also serves as a board member of the Greater Newark Enterprises Corp.

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The Thoughts Behind M&T’s $9 Million Investment in Branches

M

Bernie Shields

&T Bank is investing $9 million to further enhance its customer experience by redesigning 17 branches throughout the greater Philadelphia region. The renovations are expected to be completed by December 2019.

Banking Mid Atlantic asked Bernie Shields, Philadelphia regional president, M&T Bank, about the bank’s plans for redesign amidst lower branch use overall.

Q. What effect do renovations like these have on market share? Is the intent to grow or maintain market share?

A. The investment strategy in this region is intended to deliver our best value proposition to this community. As we pivot and refocus our resources into specific business communities, we believe our strategy can grow our share of business households within these communities.

Q. How many branches does M&T have in the greater Philadelphia region? Are there branches not being renovated? If so, why not?

A. M&T Bank is investing $9.2 million to refresh and renovate our 17 branches in the region before the end of 2019. Branch renovations were determined based on customer preference and volume. A total of 13 branches experiencing less volume were consolidated earlier this year into nearby M&T offices, without eliminating any local positions.

Q. Are the timing of these renovations connected at all to Chase moving into the greater Philadelphia area?

A. M&T’s renovations have no connection to competitor moves.

Rather, they are a result of the behavior changes seen recently in consumer banking across the industry. As consumer needs continue to change, the bank is evolving and enhancing its customer experience as part of its ongoing effort to drive longterm growth and success.

Q. What are some of the advanced technologies that are being added to the branches?

A. As a result of recent renovations and redesigns, branches will now have advanced technologies, including access to public WIFI and the replacement of teller lines with convenient service desks for online banking in an effort to remove barriers between customers and employees. New tech upgrades also include online tools for customers interested in a digital banking experience, including M&T’s Digital Appointment Setting, which allows retail and business banking customers to set up appointments with branch employees online.

Q. What impact do renovations like this have on branch security? Is it more difficult to protect employees in an open floor plan like this?

A. While modifications in branch designs do require a modification in branch security, M&T Bank is committed to providing a safe environment for both its employees and customers and has ensured the renovations are in compliance with all appropriate security requirements.

Q. One of the things being installed in your renovated branches are coffee stations. Why are so many banks putting an emphasis on free coffee? Is it necessary?

A. Our redesign is intended to meet the shift in consumer needs. Our current branch designs in this market are from a time period where the consumer needs for the branch were much different. Namely, they are designed for a significant amount of transactions such as check cashing and deposits. As consumers shift their transactions to digital self-service, they travel into our branches for more involved needs. Our clients visit our branches for more complex service needs, as well as advice and guidance on the next significant financial need. The coffee station provides a welcoming experience to our clients as they engage with our skilled bankers for a more involved conversation.

“Our clients visit our branches for more complex service needs, as well as advice and guidance on the next significant financial need.”

– Bernie Shields M&T Regional President

December 2019 | BANKING MID ATLANTIC

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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.

OCC SHUTTERS NEWARK BANK City National Bank of New Jersey in Newark was closed by the Office of the Comptroller of the Currency, which appointed the FDIC as receiver. To protect depositors, the FDIC entered into a purchase and assumption agreement with Industrial Bank in Washington, D.C. to assume all of the deposits of City National.

The three branches of City National reopened as branches of Industrial Bank during normal business hours. Depositors of City National became depositors of Industrial Bank. Because deposits will continue to be insured by the FDIC up to applicable limits, customers did not need to change their banking relationship in order to retain their deposit insurance coverage.

As of Sept. 30, 2019, City National 22

BANKING MID ATLANTIC | December 2019

had approximately $120.6 million in total assets and $111.2 million in total deposits. In addition to assuming all of the deposits of the failed bank, Industrial Bank agreed to purchase essentially all of its assets.

City National is the fourth FDICinsured institution to fail in the nation this year. The last bank failure was Resolute Bank in Maumee, Ohio, on Oct. 25. The last FDIC-insured institution closed in New Jersey was Harvest Community Bank in Pennsville, which closed on Jan. 13, 2017.

PA BANK ACQUIRES INDIANA BANK FOR $346 MILLION Northwest Bancshares, based in Warren, Pennsylvania, has entered into a merger agreement with Indiana-based MutualFirst Financial.

Northwest will acquire MutualFirst,

the parent of MutualBank, in an allstock transaction valued at $39.89 per share or approximately $346 million in the aggregate.

The acquisition provides Northwest with an additional $2.1 billion in total assets, $1.6 billion in total deposits, $1.5 billion in loans and 39 banking locations, based upon financial information as of September 30, 2019. Bank officials also said the acquisition gives Northwest access to an attractive new region of prospective customers.

David W. Heeter, president and CEO of MutualFirst, which is 130 years old, will be named Regional CEO and market leader for Northwest’s Indiana franchise after the merger is consummated. He will report directly to Ronald J. Seiffert, Northwest’s president and CEO. of Northwest.

CUSTOMERS BANK TO MOVE HEADQUARTERS Customers Bank headquarters will be moved to the nearby West Reading Borough in Pennsylvania.

The move of less than one-half mile from Wyomissing to neighboring West Reading reflects the bank’s commitment to its roots in Berks County, said Chairman & CEO Jay Sidhu, but also to its team members. “This move will not disrupt the commutes and daily routines of our team, but it will put them in a larger, more open, and more collaborative space with ample parking and walkable amenities like restaurants, drug stores, boutique shops, coffee shops, and upscale afterwork venues,” he explained.

The bank and its holding company will be moving their offices from 1015 Penn Avenue, Wyomissing to 701 Reading Avenue to the first floor of the structure built in 1928 to house the Narrow Fabric Building Industries Corp. The bank will lease about 29,700 square feet to provide work and meeting space for over 175 executive and administrative team members and “hotel space” for visiting team members based elsewhere.

The bank has leased the space for five years with an ability to renew in five-year increments for an additional 10 years. The lease price was not disclosed.

DEL. GOVERNOR BACKS JP MORGAN CHASE CRIMINAL HIRING INITIATIVE JP Morgan Chase has instituted a new public policy agenda to hire people with criminal backgrounds.

Delaware Gov. John Carney backs the initiative.

Carney told Delaware Business Now, “In Delaware, we know it’s important to offer our neighbors a second chance, to allow Delawareans who have a criminal history to compete for a job and contribute to our success as a state,” said Gov. John Carney. “That’s why we are excited about these initiatives from JPMorgan Chase – a major employer in Delaware. The company is already making important progress on its commitment to hire Delawareans and Americans with criminal backgrounds, which is incredibly important. These additional community investments, and the company’s leadership on second-chance policy initiatives will help build on that progress in our state and across the country.”

JPMorgan Chase also pledged to aid in entrepreneurship by supporting efforts at the state and federal level to expand resources that provide greater economic opportunities and mobility for people with criminal backgrounds and reduce recidivism.

JPMorgan Chase is also pushing for regulatory hiring rules changes. The Federal Deposit Insurance Corporation limits financial institutions’ ability to hire people with specific types of criminal backgrounds.

JPMorgan Chase has supported recent reforms to Federal Deposit Insurance Act Section 19 and recommends making further changes toincrease access to employment for affected workers, while maintaining the safety and soundness of the nation’s depository institutions.

NJ GOV. PHIL MURPHY IS STILL AFTER A PLAN FOR A PUBLIC BANK NJ Gov. Phil Murphy is still in the early stages of developing a plan to bring a public bank to New Jersey.

The governor updated the status of his long dormant public-banking plan on public radio last week, telling listeners he’s “frustrated” that an idea he regularly touted when campaigning for office a few years ago seemingly has remained stuck in neutral.

But Murphy said he is “not giving up” on the public bank — which would allow taxpayers to benefit from the millions of dollars in government funds deposited each year in commercial institutions. He also suggested his administration has been making some progress on it behind the scenes.

“I hope that we’re going to have some ‘beta’ test of some version of this at some point, and I’ll keep you posted,” he told listeners.

The basic premise of a public bank is to leverage the millions of dollars in taxpayer deposits that are typically held in large commercial banks to ensure those funds are used to serve some sort of public-policy mission. Advocates of public banks also say they can provide borrowers with fairer interest rates and other favorable lending terms because there’s no need to charge high fees to fund things like large executive bonuses or to pump up shareholder profits.

CUSTOMERS BANK TAKES ON HEMP Customers Bank, based in Pennsylvania, has announced it will take an aggressive stance when it comes to banking for the hemp industry. Now it will offer its full suite of banking services.

WBNG reports not even the legalization in 33 states of medicinal marijuana, and the decriminalization of marijuana in 10, could budge cannabis, hemp included, from inclusion on Uncle Sam’s list of banned substances. That all changed with the passage of the federal 2018 Farm Bill, which removed hemp from the list of banned drugs and removed restrictions on the sale, transport or possession of hemp-derived products, with some guidelines.

Larry Snow, senior vice president of commercial deposit services at Customers Bank, said, “We understand the banking challenges facing hemp companies and have the expertise to provide these enterprises with a broad range of financial services to meet their growing business needs.”

“This is not something that’s been widely taken up by a lot of banks at this point. A lot of it has to do with the confusion of medical marijuana versus hemp. I think there’s a lot of that out there still,” he added.

PHILADELPHIA COMMUNITY BANK RECEIVES APPROVAL FOR ATLANTA EXPANSION A Philadelphia community bank has received the OK to expand hundreds of miles south to Georgia.

The move is predicated on the bank CEO’s Peach state experience.

Hyperion Bank said it received approval to open its first Atlanta office, located at 3525 Piedmont Road. It’s December 2019 | BANKING MID ATLANTIC

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only the bank’s second branch — the other location opened in 2006 at 2nd Street and West Girard Avenue in Philadelphia, according to the Philadelphia Business Journal.

The decision to venture outside Pennsylvania stems from Hyperion CEO Charles B. (Charlie) Crawford Jr., who spent 12 years as founder and CEO of Private Bank of Buckhead before joining Hyperion in August 2017. “We have a natural customer base in Atlanta, as many of our investors from here have encouraged us to bring Hyperion to their market,” Crawford said in a statement.

BARCLAYS EMPLOYEES TO STAY IN DELAWARE DESPITE NJ JOB OFFERS Despite being offered jobs in N.J., Barclay’s employees opted to stay in Delaware.

Back on June 5, Barclays announced it would move 500 technologist roles from its offices in Wilmington

to a new, state-of-the-art campus in Whippany, New Jersey, where they would join nearly 1,900 colleagues.

At the same time, people inside the organization said the company had warned another small group of people that they would be laid off in late 2019.

In a state that’s seen its share of banking job losses, that elicited an immediate reaction from state officials and the congressional delegation that they would do all they could to protect those jobs. And it sounded like they’d have private-sector support because a number of financial institutions had previously told the Delaware Business Times they were looking to hire people into similar roles.

Delaware also had a unique opportunity to demonstrate to prospects that the state has many selling points that would overcome the comfort and security of a known situation (and the tenure already earned at Barclays).

Peapack-Gladstone Honored With Gender Diversity Award Peapack-Gladstone Financial Corporation, along with 29 other companies, has been named to the Executive Women of New Jersey Honor Roll: a list of New Jersey public companies that have three or more women on their boards. The honor was noted at A Seat at the Table Corporate Gender Diversity Awards Breakfast, a biennial event.

This list is part of the organization’s efforts to ensure that women have equal access to the boardroom and high-level executive leadership. The event also featured the exclusive release of EWNJ’s report on the number of women serving on boards and in the top leadership of public companies in New Jersey. The report, produced in collaboration with PwC, is the only one of its kind in the state.

“This year, a record 30 companies made our list. And while we clearly have a lot more work to do, this news shows that our efforts are having an impact. It demonstrates that more companies recognize the tremendous value of women’s leadership and are taking active steps to ensure that women have equal access to opportunities for ascension,” said Barbara E. Kauffman, president of EWNJ and

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Beth Welsh, Peapack-Gladstone Financial Corporation Board Member (right center) with members of the Executive Women of NJ.

executive vice president and chief operating officer of Newark Regional Business Partnership.

“Our list reflects the progress companies have made since 2017 when our last list was published with 22 companies,” added Anna María Tejada, Esq., president-elect of EWNJ, co-chair of A Seat at the Table, and partner at Kaufman Dolowich & Voluck, LLP. “We applaud these companies’ progress toward inclusion and diversity, and as quantified in EWNJ’s research, New Jersey’s business environment is stronger as a result.”

“While it is encouraging that this

year’s list has the highest number of companies since we began publishing it in 2014, the pace of progress remains woefully slow particularly given the demonstrable business value that women’s leadership delivers both financially and operationally. There are a significant amount of companies that still need women in their leadership ranks and numerous women across the board who still need sponsors,” explained Faith Taylor, EWNJ board member, co-chair of A Seat at the Table, and professor at Feliciano Business School of Montclair State University.

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www.bankhorizons.com Don’t miss BankHorizons, March 3, 2020, 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.

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BANKING MID ATLANTIC | December 2019

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