Lenders are from Mars; Finance is from Venus: Bridging the Divide in Community Banking with Data and Empathy

By: Benjamin Crowley, Managing Director

If you’ve ever sat through a spirited ALCO (Asset-Liability Committee) meeting at a community bank, you know the dynamic: the Chief Lending Officer (CLO) is ready to charge into the market, while the Chief Financial Officer (CFO) is quietly clutching the balance sheet like a security blanket. It is a classic case of Mars and Venus—two planets orbiting the same sun, but with very different atmospheres.

The Martian Mindset: CLOs and the Art of the Deal

CLOs are the rainmakers, the dealmakers, the ones who see every business owner in town as a potential lifelong client. Their world is built on relationships, intuition, and a healthy appetite for risk (within reason, of course). When a promising loan opportunity comes along, the CLO’s first instinct is to find a way to say ‘yes’—and then figure out the details.

Problem-Solving: CLOs tend to approach problems with a ‘let’s make it work’ mentality. If a borrower’s financials are a little thin, they will look for compensating factors: strong collateral, a personal guarantee, or a long-standing relationship. They are creative, flexible, and sometimes a bit impatient with process.

Communication Style: CLOs are storytellers. They paint a picture of the borrower’s business, the local economy, and the potential for growth. They are persuasive, sometimes to a fault, and can be frustrated by what they see as unnecessary red tape.

Ego Traps: The CLO’s ego is often tied to loan growth and portfolio performance. They want to be seen as the engine driving the bank forward. This can lead to ‘deal fever’—the urge to book loans even when the pricing or structure is not ideal.

The Venusian View: CFOs and the Pursuit of Precision

CFOs, on the other hand, are the guardians of the bank’s financial health. They see the world through the lens of risk, return, and regulatory scrutiny. Every new loan is a potential asset, yes—but also a potential liability.

Problem-Solving: CFOs are methodical. They want to see the numbers, run the stress tests, and understand the impact on capital ratios and liquidity. They are champions of balancing the maturity/rate mismatch and driving pricing discipline, making sure that every loan is priced to reflect its true risk and cost of funds.

Communication Style: CFOs speak in spreadsheets and scenarios. They are comfortable with complexity and often assume others are, too. Their presentations are data-rich but sometimes lack the narrative flair that brings numbers to life.

Ego Traps: The CFO’s ego is tied to the bank’s financial performance and regulatory standing. They may dig in their heels on pricing or credit policy, sometimes at the expense of growth or customer experience.

When Worlds Collide: The ALCO Meeting

Nowhere is the Mars-Venus dynamic more apparent than in the ALCO meeting. The CLO is pushing for more aggressive loan growth, while the CFO is waving the flag of pricing discipline and risk management. Both are right—in their own way.

Loan Growth vs. Pricing Discipline: CLOs want to grow the loan book, sometimes by offering competitive rates or flexible terms. CFOs worry about net interest margin (NIM)—the difference between what the bank earns on loans and pays on deposits. If loans are priced too aggressively, NIM suffers, and so does profitability.

Customer Experience vs. Policy: CLOs are focused on the borrower’s experience—speed, flexibility, and personal touch. CFOs are focused on consistency, compliance, and minimizing exceptions. The result can be a tug-of-war over policy exceptions and turnaround times.

Deal-Making vs. Deal-Breaking: CLOs see every deal as an opportunity. CFOs see every deal as a potential risk. The healthiest banks find a way to balance these perspectives, but it is not always easy.

Therapy Tip: Try a ‘role reversal’ exercise: have the CLO present the deal from the CFO’s perspective, and vice versa. It is amazing what a little empathy can do.

The Ego Factor: When Progress Stalls

Ego is not a dirty word in banking—it is often what drives high performance. But unchecked, it can lead to gridlock. CLOs may feel their judgment is being second-guessed. CFOs may feel their caution is being ignored. The result? Missed opportunities, or worse, mispriced risk.

We (at TKG) often find that ‘internal misalignment’ is a top barrier to growth. That is not just a personality clash, it is a major internal strategic risk.

Therapy Tip: Schedule regular ‘alignment check-ins’ outside of formal meetings. Sometimes, a candid coffee chat can clear the air faster than a 30-page PowerPoint.

The Power of Product Profitability: Speaking a Common Language

Here is where the planets can align: product profitability measurement. When both sides have access to detailed, trustworthy data on how each loan product performs—not just in terms of volume, but true profitability—conversations become more productive.

What Is Product Profitability? Product profitability means looking beyond interest income to factor in all costs: funding, credit losses, origination, servicing, and overhead. Tools like Funds Transfer Pricing (FTP) and Cost Accounting help banks allocate costs and revenues more accurately.

According to Chris Nichols of SouthState Correspondent Bank, “Many underperforming banks are not aware of the drivers of ROA and lack the tools to measure what drives profitability for each product, branch, and manager—without such tools, we have seen some bankers struggle chasing variables that do not lead to enhanced performance as measured by ROA. In the latest reporting period, it appears that community banks with lower efficiency ratios, higher liquidity ratios, and higher noninterest income outperform the industry average.” [SouthState Correspondent Division, “Drivers of ROA for Community Banks,” 2024]

How It Helps: When the CLO and CFO can see, for example, that small business loans generate a .70% ROA after all costs, while commercial real estate loans generate 1.66%, desired outcomes become a little clearer and it is a little easier agree on where to focus growth efforts. Pricing discipline becomes less about ‘winning’ and more about ‘winning profitably.’

Now, layer on detail about the profitability of high-spread core deposit balances used to fund those C&I loans vs. thinner margin wholesale funds used to fund every new $2 million CRE loan, and now we are getting somewhere. With clarity on what value a relationship brings to the table, deal-making, hurdle rate pricing, and ALCO metrics of each relationship become obvious to both sides of the table. Desired outcomes and the roadmap to shared success become crystal clear.

Therapy Tip: Make product profitability reports a standing agenda item. Celebrate wins together—and use the data to drive continuous improvement.

Cost Accounting: The Devil in the Details

Detailed cost accounting studies can be a game-changer. By understanding the true cost of each product and process, banks can identify hidden inefficiencies and opportunities for improvement.

How It Helps: Cost accounting gives both CLOs and CFOs a fact-based foundation for decision-making. It takes the emotion out of debates and focuses attention on what really matters: sustainable profitability.

Therapy Tip: Invest in training for both teams on cost accounting basics. The more everyone understands the numbers, the less room there is for misunderstanding. The process of implementing cost accounting is the largest hurdle a bank can face when it comes to standing up a profitability model.

At TKG, we have seen this story play out over and over again: Finance pays for software to begin measuring profitability. Finance tries to allocate costs. Lending and branches disagree with allocations. Nobody trusts the data coming out of expensive software. Reports are not used. Lenders continue to chase large deals with no deposits. Branches keep saying ‘yes’ to pricing exceptions to the loudest customers. Bank continues to fund portfolio with brokered deposits and high-cost borrowings. Costs increase. Margins shrink. Bank calls TKG to help fix all the problems.

Sometimes we get there in time… sometimes it is too late…

Clean Data: The Therapist in the Room

In our Mars-Venus analogy, clean, trustworthy data is the therapist—neutral, objective, and focused on the facts. When both sides trust the data, it is easier to have honest conversations about trade-offs and priorities and easier to define and execute strategic planning objectives.

How It Helps: Clean data enables profitability analysis, accurate pricing, and better customer insights. It also builds trust between CLOs and CFOs, and with regulators and board members.

Therapy Tip: Appoint (or outsource) a ‘data steward’ responsible for ensuring data quality across departments. Make data integrity a shared cultural mandate, not just an IT issue.

Bridging the Gap: Practical Steps

So, how can CLOs and CFOs move from conflict to collaboration? Here are a few practical steps:

Conclusion: Same Sun, Different Orbits

CLOs and CFOs may come from different planets, but they are part of the same solar system. By embracing their differences, speaking a common language of data, and keeping their eyes on shared goals, community banks can turn healthy tension into a source of strength.

After all, Mars and Venus both shine brightest when they are in alignment.