We had to face earnings challenges, credit issues, TARP, regulatory fire-breathing, assessments, unemployment, increasing bank failures/mergers, and tight budgets … and that might have been the good news. All in all, our clients felt that 2009 was just about the toughest year any of us can remember.
But, at the same time and in the midst of this chaos, we also saw good gutsy bankers working the credits, managing expenses, caring for the customers and showing a lot of grit and determination to get to the other side of this crisis lean, mean, and ready for long-term success.
And, hey, it’s not all bad. Christmas is here. You’re still in the running in the fantasy league. Nobody has found the tequila stash in the garage yet. Most of last year’s clothes still fit. You’re pretty sure that there’s at least one kid who put that Obama Chia thing under the tree for you just as the Dubya version is giving up the ghost. And Aunt Gertie decided to go to Jamaica with the new boyfriend for Christmas instead of sleeping on the cot in the family room for the 11th straight year and making the Jello surprise mold that started the town epidemic last year. Rock on!
And, best of all, the big finish is here! The 2009 GonzoBanker awards are locked, loaded, hereby presented for your perusal and consumption. And offered, mind you, in a year where there was no shortage of strange, weird, head-scratching news that makes for some darn fine fodder.
So, put lead into the nog, put up your feet, and enjoy.
The ‘Holy Crap’ Moment of 2009
The moment when banks realized they had to replace millions in checking overdraft fee income. Between threats of the Dodd bill and new Fed regulations with POS/ATM overdraft opt-in, banks are scrambling for new product ideas. $100 fines for stealing pens at the teller line is all that we’ve come up with so far.
Bank Deal of the Year – BB&T takes Colonial. A nice, cheap pickup for BB&T that provides great cost cutting opportunities and expands BB&T’s footprint in the Southeast, which will ultimately come back strong economically.
Best Smaller Bank Merger of the Year – First Niagara Financial Group takes Harleysville – two great community banking organizations coming together. Keep it rolling, guys!
The Shrewd Acquirer Awards – For doing great acquisitions in 2009:
The Gonzo Banker of the Year Award – goes to John Kanas for his acquisition of Bank United in Florida and his in-your-face efforts to recruit top bankers in this marketplace (check out his American Banker full-page ads if you get a chance). Kanas is bringing the North Fork playbook to the sunshine state, and he will be a tough competitor.
The Legend Award – goes to retiring Wells Chairman Dick Kovacevich. During an industry crisis built on greed and self-serving behavior, it was sad to see a true honorable banker end his career. The man who didn’t want the damn TARP money will always inspire great bankers.
The Bank Iron Guts Award – goes to First Niagara Financial Group for its massive purchase of PNC branches and expansion into Pennsylvania.
The Credit Union Iron Guts Awards – goes to two organizations that made big strategic moves. Space Coast Credit Union (Melbourne, Fla.) did a bold merger with the failed Eastern Florida Financial Credit Union (The largest CU merger ever!), and Royal Credit Union (Eau Claire, Wis.) acquired 11 branches from Anchor Bank, nearly doubling its branch footprint in one move.
Best Performance by a Regulator – the FDIC gets busy and kicks butt with its failed bank resolution process. Say what you will about regulators, the deal-cutting and speed of execution by FDIC should make taxpayers feel like a good steward is watching their rears.
Worst Performance by a Regulator – the NCUA whistles past the graveyard and fails to communicate with worried credit unions. The lack of transparency and absence of hard numbers provided by NCUA has been embarrassing when compared to FDIC.
Eye on the Ball Award – This one goes to the systemic risk brain trust at the Federal Reserve for issuing $135,000 in civil money penalties against Regions Bank for … brace yourself … flood violations. Way to keep things in perspective during a once-in-a-century financial crisis guys!
Award That Will Blow Your Freakin’ Mind, Bro – This is also the Biggest Regulatory Dilemma of 2010. What do federal banking regulators do with accounts of medical marijuana dispensaries that are legally licensed in a state but clearly breaking federal law? Should they file a SAR and close the account? Are loans automatically classified “Doubtful” due to expected memory lapses from dispensary owners? What is an acceptable munchie budget when analyzing pro forma cash flows? Where do we sign up to be collateral inspectors?
The Garage Inventor/Entrepreneur Award – John Beale, City National. Faced with several key profitable customer niches that had very specific cash management needs, John and his team ignored all of the big vendor stories and just wrote a system for them. It turned out to be cheaper than anything they could buy, and man, it’s good to boot. Proof again that one good piece of software that meets a specific need trumps a big picture any time. Kudos to John and his team.
The “Great Escape” Award – First Republic Bank. Having been independent then sold to Merrill Lynch and then to B of A with Merrill, Jim Herbert and the team at First Republic find themselves being spun out in 2010 (one hopes) to independence by problem-riddled B of A to an investment team lead by … Jim Herbert and the team at First Republic. And nobody even had to change offices. We’re a bit dizzy telling this, but it is nice to see a great entrepreneurial bank get another at-bat as an independent.
The Tireless Heroes Award – goes to all the crusty credit officers and Red-Bull-powered credit analysts who have been slogging through portfolio reviews, workouts and loss provision analysis in 2009. Many “old school” credit professionals have been proven wise once again in this credit cycle.
The Seek and You Shall Find Award – goes to longtime bank CEO Tom Hawker. After the unfortunate failure of County Bank in Merced, Calif., from the real estate collapse, Hawker didn’t sit around. Instead, he ended up making an arduous trek through China to work with bankers hoping to better develop their own financial system. Nice work, Tom.
The ‘Shoot the Messenger Award’ – goes to poor consumer collections managers who have ordered to “fix” their institutions’ delinquency problems after years of poor underwriting and FICO over-dependence.
The What Doesn’t Kill Me Award – goes to Peter Duffy for his non-stop travels through the credit union industry to spread his concerns about its financial condition and impact on healthy players. Pete has stirred up an important industry and policy discussion.
The ‘No Guts No Glory’ Award – Kit Snyder and his team at Consumers Credit Union in Oshtemo, Mich. This $315 million credit union was the very first credit union to convert to Harland’s Phoenix system. The guts have been displayed. Kit, we’re looking forward to seeing the glory that follows.
“Don’t let all the lines connecting everybody in our org chart fool you. We really don’t get along that well. The lines should probably be shaky, broken and uncertain!”
“You want to know my marketing strategy? I pay this guy at the newspaper a few hundred bucks under the table and he puts my ads up in front every week.”
Technology of the Year – mobile banking, which went from the Petrie dish to mainstream in breathtaking time. The technology, the banking applications and the customer acceptance have converged faster than anybody could have thought. Bank of America has 3.5 million users in 15 months and didn’t push that hard. Numbers like 30-50 million users are being touted in a 3-year span. Amazing. Now we all have to figure out the delivery, service and relationship management consequences of this sea change.
Technology Story With the Greatest Buzz – USAA introduces remote deposit from the iPhone. While it’s still unclear about how popular such consumer behavior will become, the key point is USAA became the talk of delivery in 2009 and branded convenience to its customers like no other player.
The ‘Biggest TV Show About Nothing’ Technology Award – LinkedIn. About every five seconds, we all get an announcement that someone has joined someone else on this business social network. We have friends, groups and probably tribes by now. But what, exactly, has anybody seen in terms of a tangible business benefit from all this linking? Nada. Maybe there’s a breakout use for this linking. We’ll see. For now, though, we have this strange feeling that we’re looking at some 2009 business version of a big chain letter.
Technology Idea Whose Time has Come – Lowest cost payment routing. There’s a lot of money to be saved by getting money from place to place in the cheapest way possible. Why wire when we can ACH, bubba? The technology and system logic is there to do it. People love to save money. Let’s get in the middle of making this happen before somebody does it for us.
Technology in Search of a Real Business Need Award – next-best sell logic. How long are we going to try and write software that tells branches that they should sell a card to a checking customer? We have been in branches that have spent most of their time trying to figure out how to turn this damn technology off. Come on. We have never seen a good salesperson who ever needed any system to tell them when or what to sell. Enough already with the silly demos.
The Home Depot for Technology Must Do it Themselves Award – data warehouse and information management. After 15 years of vendor promises of simple dashboards and easy to use ad hoc tools, banks still rely more on kids with pony tails named Jared and a copy of MS SQL than they do on technology “partners.” We can do better here, guys.
The Waiting for Godot Award – the single screen that summarizes the entire customer relationship, including products not housed on the core system (investments, insurance). Technically possible – sure. Delivered without excruciating customization – no.
The ‘Whatever Happened to …?’ Award – personalized ATM messages. So far, all we’ve seen is, “Do you want that all in twenties?” which we don’t think qualifies. Wasn’t this going to transform one-to-one marketing?
The Tyra Banks Award – Personal Financial Management technology. This is the award for technology with a ton of appeal on the outside, but it’s being drowned in its own BS. There are some cool things that could be done with PFM with payments and aggregation; a pie chart depicting my spending mix among bread, beer and bouillabaisse ain’t gonna cut it.
The No Show Technology Award – vendors that provide profitability and budgeting/planning platforms. After nearly 20 years in development, we still see a hodgepodge of solutions and entrepreneurial competition going after the old crowd of IPS Sendero, Bancware and ProfitStars. These systems are critically important for banks in the future but the pickings aren’t great.
The More Awkward than Your Middle-Aged Uncle Announcing to Your Friends at the Party that He is ‘Down with Flo Rida’s Beats’ Award – Banks and CUs, especially the big banks, trying to act hip on Twitter and Facebook.
Bank Core Deal of the Year – Without question, this one goes to Metavante for signing $20B People’s United Bank in Bridgeport, Conn. Yeah, we know abut the FIS merger, but this was Metavante all the way.
CU Core Deal of the Year – Symitar’s Cruise signs $3.6 million Brookland FCU in West Columbia, S.C.
Tech Deal of the Year – CheckFree signs with Wal-Mart to allow the retailer’s customers to pay bills (not just Walmart bills) at its nearly 3,800 locations. Damn, man, a CheckFree sales rep better be lounging in Hawaii over this one …
The Large Community Bank Big Mo’ Award – Fiserv Premier is quietly selling boatloads of systems to the $500 million to $2 billion market.
The No Mo’ Technology Award – This goes out to the foreign vendors who proved more able to write press releases and draw architecture diagrams than to actually deliver into the U.S. market. Temenos, iFlex and Infosys – stop the chest thumping immediately.
Most Hyped Technology Award – Brought to you by Segway – Unseating Fiserv XP2 is the forthcoming next gen credit union product from Fiserv – Acumen. The buzz is there, but is it the buzz of machinery working smoothly or the buzz of flies on carrion? Let’s all hope for the former – we need some fresh competition out there in credit union technology!
The Vendor Who’s Suddenly Getting Return Calls Award – goes to any vendor who sells collections software.
The KISS Award – Q2 is keeping it elegantly simple in delivering solid retail and business Internet banking on a single platform.
Walking the Vendor Walk Award – Starting out as a cool little online origination tool for customers, Mortgagebot has delivered as promised and can now be found as the de facto origination tool in many a bank and CU branch and LPO.
The Damn This is Expensive Award – Mortgagebot, for its users that only utilize the product as an online app for customers without auto-decisions, disclosures or alerts.
The Golden Cufflink (Earring) Award – Wendy Conley, S1. A vice president who does demos, and good ones at that? Almost too good to be true. But Wendy can go deep on systems stuff, can engage an audience, and puts on quite the show.
….from a core sales rep:
“OK, next is our two-hour session on technology. This is going to be tough because I’m not what you would call a [does quotation marks sign with hands] “technology guy.” But I’d be happy to write down any questions you have.”
…from another sales rep who didn’t even blush when she said this:
“Yes, we have had some well publicized problems with customer service in the past year. But a lot of that is just in the opinion of our customers.”
…from another sales rep:
“This data warehouse must have been born in Bethlehem – it’s a miracle worker!”
…from an overly sincere sales rep:
“The functionality you’re going to see today is not like Fiserv 2.0, it’s real!”
Well, then it’s a good thing we’re sitting by the Champs Elysees while we’re watching this.
A presenter who was asked when certain functionality would be available said, “Well, a lot of what I’m showing you now is in the international version of our product. I’m not sure if we’re planning to put it in the U.S. version.”
That’s Release 12, due in June 2035.
One presenter started her presentation by stating, “Anything this system can’t do now is coming in the next release.”
He’s got high hopes, he’s got high-apple-pie-in the-sky hopes.
On day two of a presentation that was not going well, the presenter looked at the group and said, “Well, it’s 10 a.m. and you’re not unhappy yet, so I’m feeling pretty good.”
Getting to know you, getting to know all about you….
One presenter who was clearly subbing at the last minute started the presentation by asking “Don’t you guys do some sort of real different lending?”
Well, OK, that answers that.
When asked whether the system could handle regs in all 50 states, the vendor responded, “Well, I know what you’re going to say if I say no so I’m going to say yes.”
So GonzoBankers, let’s put 2009 to bed and make some commitments for a better 2010. If the events of the past 12 months weren’t so painful, they would be comical, or maybe just surreal. When Tiger and his girls have faded from our memory, we will all look back on this year as a time when the classic banking playbook got thrown out. So many assumptions about how we operate an insured financial institution are gone. Many think the opportunities are gone forever, while risk-takers are just beginning to rev up for a new era. Amidst financial pressure, stupid regulation and an anxiety-ridden economy, we hope all bankers will get fired up for 2010. The great part about a shredded playbook is that GonzoBankers will get to write the new one. It’s going to take a lot more creativity and toughness to make money than it has for decades, but opportunities will emerge. New leaders will get famous and Cornerstone will be there to hand them a fresh GonzoBanker T-shirt. We’re not slowing down, and we hope bankers everywhere make the same commitment. Let’s roll.
Every generation gets a chance to change the world
Pity the nation that won’t listen to you boys and girls
Cause the sweetest melody is the one we haven’t heard
Is it true that perfect love drives out all fear?
The right to appear ridiculous is something I hold dear
Oh, but a change of heart comes slow
It’s not a hill, it’s a mountain
As you start out the climb
Listen for me, I’ll be shouting
We’re gonna make it all the way to the light
But you know I’ll go crazy if I don’t go crazy tonight!
U2 – 2009
P.S. – the events of the past 12 months have rattled our brains so significantly, we respectfully bow out of the prediction game this year. Plus, we’re usually wrong anyway.
GONZOBANKER TEAM QUESTION FOR 2009:
Song: “Midnight Rider”
Original Artist: The Allman Brothers Band
Cover Artist: Kenny Wayne Sheperd
Song: “Free Fallin’”
Original Artist: Tom Petty
Cover Artist: John Mayer
Song: “Big Yellow Taxi”
Original Artist: Joni Mitchell
Cover Artist: Counting Crows
Original Artist: Blue Oyster Cult
Cover Artist: Metallica
A close second goes to Dolly Parton’s 2002 cover of “Stairway to Heaven.”
Song: “Knockin’ on Heaven’s Door”
Original Artist: Bob Dylan
Cover Artist: Guns n Roses
“The Broadway musical Mama Mia! took the music of ABBA to a new level—wonderful!”
Original Artist: Joni Mitchell
Cover Artist: Cyndi Lauper
Song: American Woman
Original Artist: Guess Who
Cover Artist: Lenny Kravitz
Song: “Reason to Believe”
Original Artist: Tim Hardin
Cover Artist: Rod Stewart
Song: “Red, Red Wine”
Original Artist: Neil Diamond
Cover Artist: UB40
Song: “Blowing in the Wind”
Original Artist: Peter, Paul and Mary
Cover Artist: We shouldn’t pass by this question without recognizing ‘50s Pat Boone for the most blatant, self-serving and profitable covers in history, recording everything he could 30 minutes after Little Richard and Fats had the vinyl in the stores (can you believe that guy actually recorded a song called “Isn’t that a shame”? He owes those guys big-time Christmas gifts or something).
Song: “(What’s So Funny ‘Bout) Peace, Love & Understanding”
Original Artist: Brinsley Schwarz (Nick Lowe’s band)
Cover Artist: Elvis Costello
Original Artist: Trent Reznor
Cover Artist: Johnny Cash
Song: “Wipe Out”
Original Artist: The Surfaris
Cover Artist: Fat Boys featuring The Beach Boys
Song: Boys of Summer
Original Artist: Don Henley
Cover Artist: The Ataris
These kids took a classic song and made it better! The ultimate wakeboarding or snowboarding anthem.