Monday, March 18, 2013

Banker Quotes: As Told To Me v5

I learn a lot from bankers and industry experts as I visit their offices, speak to them on the phone or at industry events. Occasionally they will offer an insight that I think my Twitter followers would find interesting. Since I estimate my Twitter community only reads about 10% of their tweet stream, and so many of my blog readers do not follow Twitter, below are selected quotes that I tweeted since version 4.

Note that if the quotes exceeded 140 characters, I would have abbreviated or substituted some words to make them fit. So if you are a CPA and want to count, a few of the quotes may exceed the 140 here, but not on Twitter. I quote people anonymously to protect the innocent.

1. Bank CFO to me: Whistling by the graveyard is the best of bad choices when looking at our parked deposits.

In the third quarter 2008, the average money market account had a balance of $72,823. Scroll forward to 3Q 2012, the average balance ballooned to $112,060. Do you think your duration assumptions should change?

2. Bank consultant: If the house is on fire, don't expect credit for finishing the basement.

Regulators will focus on the fire. Your carpeting job in the basement doesn't matter.

3. Car salesman to me: 98-99% of my 2012 sales were financed.

And auto loans performed well during the most recent recession. I suppose the saying is true: You can sleep in your car but you can't drive your house.

4. Bank CEO to me: A great relationship might get you 25bps on a loan. Covenants can get you another 25-50.

Skeptical. I would like to see this in action. So those with great relationships don't discount the price to "get the deal done?"

5. Bank institutional investor to me: "For banks to be relevant they should have 35% of revenue in fee income." Me: Profitable fee income?

Your level of fee income only matters if something drops to the bottom line. For many, the only thing left for the bank is the risk.

6. Bank CEO: We're feeling some [economic] recovery but why does it have to be so painfully slow?

It took US Bank two years to evict Kiss' Ace Frehley from his house after he stopped making payments and paying taxes. 

7. NJ Bank Exec: We have a handful of shore loans where we not only can't find the building, we can't find the land. #sandy

Real world problems.

8. Bank CEO: We need to fix our processes because I can't get the egg through the snake fast enough.

At a time of low loan demand, perhaps a process review is in order.

9. Bank consultant: If a regulator doesn't like your bank, there's always something they can find in Compliance. #tyranny

Unfortunately, true.

10. Retail Banking Exec: Until today retail deposit products were driven by the land of the free.

An industry self-inflicted wound. Agree?

11. Bank director: re-imagining the branch network will include complexity and drudgery. But it will be worth it.

I was surprised to hear this from a director. Usually, by change, bank director's mean switching to the tuna salad instead of the chicken salad.

12. Bank Chairman: In my business, getting something done quickly meant by Friday. In banking, it's in two or three years.

One reason: There are roadblocks to asking permission and penalties for begging forgiveness. But let's not forget the Sergeant's that run our bank that embrace change like my daughters embrace my opinion.

13. Bank CEO: We're doing so well because our competition is so bad. #classic

And many of you reading this are this bank's competition.

14. Bank Chief Risk Officer: Our biggest risk is regulatory grind. It is constantly wearing down our staff.

Let's not allow the final arbiter of our strategy to be the "no" person in compliance.

What are you hearing out there?

~ Jeff

Note: To get banker/industry quotes as I hear them, follow me on Twitter @JeffMarsico

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