Credibility of Living Wills / M&A as Succession Planning / Cultural Due Diligence / Women in Banking
By:
Sharon J. Lorman
Jeffrey P. Marsico
Guest: Glenn E. Moyer, Senior Advisor
Podcast Show Notes:
Our This Month In Banking (TMIB) podcast highlights significant news and events in banking and our hosts’ take on them, along with interviews with industry thought leaders. TMIB will be available on the last Wednesday of every month here, on Stitcher, Soundcloud, and iTunes for your listening enjoyment. Join us on your commute or at your desk.
Topic 1: Credibility of Living Wills
Start time 3:37
Regulators struck down the living wills of five of the eight megabanks under evaluation, including JPMorgan Chase, Bank of America and Wells Fargo, requiring them to submit fixes to their resolution plans by October 1 or face more stringent regulatory requirements. Is the premise of living wills credible? Does it make sense to sell off pieces of significant banking businesses when all banks may be struggling?
Topic 2: M&A as Succession Planning
Start time 10:25
Hampton Roads Bankshares in Virginia Beach juggled a search for a new chief executive while also arranging for its eventual merger with Xenith Bankshares in Richmond, Virginia. Hampton Roads was in the early stages of a CEO search that its board expected to last four to six months. The board decided on several occasions to keep looking for a successor for their recently departed CEO. Charles Johnson, the company’s chairman, was interim CEO – as Hampton negotiated with Xenith. The search was finally suspended in mid-January, less than a month before the companies agreed to their $107 million merger. Xenith’s CEO will be the CEO of the combined entity. Is CEO’s age an issue? Do banks have their next CEO-in-waiting within their executive ranks?
Topic 3: Cultural Due Diligence
Start time 18:14
In February, Bank Director magazine held its annual Acquire or Be Acquired conference in Arizona. Among the topics was “Cultural Due Diligence”, where buyers and sellers ensure that their respective cultures are compatible enough for a successful deal.
In an article in SNL on February 2, it was noted that coveted lending business and the core deposits that come with that business is often loyal to individual bankers, and not to the banks. If the banks don’t mesh well, a good lender could get lured away by the competition. And even when the cultures blend well, buyers have to continue to work to keep talent on board.
Banks are increasingly turning to corporate psychologists to address internal issues such as productivity, hiring and merger due diligence. In mergers, corporate psychologists can play an important role addressing internal issues such as outlining roles and responsibilities and determining whether everyone will be happy once the deal closes.
What happens when you blend incompatible cultures?
Topic 4: Women in Banking
Start time 25:15
The number of women in the CEO role in banks is extremely small as compared to the number of women in banking as a whole, and the largest banks have the fewest women in the CEO seat. Why is this?
Watch for episode 5 of This Month in Banking to be released on Wednesday, May 25, 2016 and a new episode on the last Wednesday of every month.
Thank you for listening!
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