Community Banking According to Andy

I enjoy Twitter because of the relationship threads I have maintained, the good-natured jabbing among friends, and keeping abreast of news I would not otherwise read. One of my tweeps (Twitter friends), is Andy Schornack, CEO of Flagship Bank Minnesota, based in Wayzata. He exemplifies the best of next generation bank leadership, with eyes wide open to the next iteration of banking in our rapidly changing environment.

Andy recently tweeted a string of tweets describing his investor group's original investment, their evolution from troubled to healthy institution, and what it took for him and his team to be successful. It was so awesome I asked if I can reprint here. Andy graciously said yes. Below are the flurry of tweets he sent in his stream. 

Twenty four tweets, and worth every one of them. I suggest following Andy on Twitter.

1/ @Schornack

At the end of July 2013, we invested $1.8MM to buy 49% of Flagship Financial Group, Inc. This was the start of one fun journey that continues today.

2/ @Schornack

The primary asset of the organization was Flagship Bank Minnesota, a Member FDIC and Equal Housing Lender with two locations in the Twin Cities Metro Area.

3/ @Schornack

The bank was under a cease and desist order and struggling with a high level of troubled assets. However, it had a great group of employees and was in a market that I knew very well.

4/ @Schornack

In June 2013, Flagship Bank Minnesota had $94 million in assets and $62.8 million in loans in the two locations. In June 2021, we were up to six locations, $327.6 million in assets and $233.7 million in loans. Here's some lessons learned along the way.

5/ @Schornack

Employees in a service business like ours are key. Many of those original employees are still with us. We have added many more along the way but we have found the line is true that people do business with people they like and know. Good people helping good people, always.

6/ @Schornack

Good customers drive good businesses. Invest in improving your client base. You don't have to be all things to all people. Focus efforts on building clients with high lifetime values. Know their tenure and their services/products needs. Invest in what is important to them.

7/ @Schornack

In our bank, one of these client bases was 1-4 family rental properties. In 2013, we had around $11.5MM in total 1-4 family loans, most of which were not investment properties. In 2021, we are up to over $70 million, mostly investment properties.

8/ @Schornack

It is a niche that has only grown over time and one that has shown very little net losses since we started making these loans around the U of M in 2005-2006.

9/ @Schornack

Running a bank is not much different than running a small business. A lot of times this is confusing to many. Basic idea is that sales to a bank are loans. Inventory are deposits. The item is that profit is not made on day of sale but over time.

10/ @Schornack

For perspective, the net interest income + non-interest income (Revenues for 2012) were a total of $4.2 million. This is not a high level of revenues to handle all the expenses involved with operating a troubled banking organization at the time.

11/ @Schornack

A big focus then was to reduce our non-employee related expenses while growing strength in a good client base and reducing our interest expenses by improving our mix of suppliers (changing from non-core funding to core funding of our loans).

12/ @Schornack

So this was my charge. Like any SMB owner doing a new acquisition, I broke down the expense book. We still catalog every expense to every vendor and I sign nearly all the checks. The result was that our non-staff expenses have gone from 2012 levels of $2.4MM to 2020 at $2.7MM.

13/ @Schornack

Our net interest income + non-interest income in the meantime has grown from $4.2 million in 2012 to $12.2 million in 2020.

14/ @Schornack

Strong expense management structures allow the SMB more flexibility then to further invest in strong staff and improved client experiences.

15/ @Schornack

Good client experiences don't necessarily mean high expense structures. It's a matter in investing prudently and managing what using a sports term is called unforced errors, or what I consider are unnecessary expenses.

16/ @Schornack

Picking good partners makes the world of a difference. I couldn't be where I am today without the support of mentors, solid business partners, & great co-workers. Brian Wagner, Flagship Bank's President and I have worked together for 16 years. Jackie Herman, our COO 2013.

17/ @Schornack

They have both played a huge role in growing our bank, executing on two major acquisitions that launch padded our ability to scale across the metro area.

18/ @Schornack

Acquisitions create uncertainty and most people don't like uncertainty. The best way as a SMB to work with existing employees on an acquisition is to be transparent on your plans and your goals. Explain who you are, what your story is, and how it impacts them.

19/ @Schornack

I am a banker so in any SMB acquisition I think it pays to know your numbers. I model everything, I still model nearly everything. The same spreadsheet I used when buying Flagship is the one I use monthly to update my rolling 12 month earnings. Yes each month, I do the math.

20/ @Schornack

The value to me is more than the data entry. It is the process of getting close to the data so that I see where it is coming from and how it flows through our organization. I want to always know my numbers. 

21/ @Schornack

The other item that I fixate around is writing a monthly management report to my board. It covers all the CAMELS components the regulators grade banks on. I have found the process of writing the report to be an important way to organize my thoughts, provide conversation topic...

22/ @Schornack

...and really guide what the items keeping me up at night are within our banking organization. It covers the high risk clients, the cash flow and capital needs of the organization, our employees, and many other items as the come forward to drive conversation.

23/ @Schornack

Writing a report to our board even if you are a small SMB, I believe is a great exercise to organize and validate your management decisions. If we leave them as thoughts, sometimes they aren't fully thought through or maybe something gets missed that is important.

24/ @Schornack

In the end, I am extremely proud of what we have built at Flagship Bank and our company. I am proud of my coworkers, my employees, and all the stakeholders. It has been a blast and I look forward to the next 8 years! Exciting things to come!

Does this read like a banker that builds operating discipline within the bank's culture so it has the resources to invest in the things that matter to benefit its stakeholders? I think so. 

I would say Andy and Flagship Bank Minnesota are Squared Away!

~ Jeff

And please consider reading the book: Squared Away-How Can Bankers Succeed as Economic First Responders. 

Ten percent of author royalties go to K9sForWarriors.org, who work to bring down the suicide rate among our veterans. 

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Thank you!

A Banking Nerd Book Tour

As many of my readers know, I wrote a book, Squared Away-How Can Bankers Succeed as Economic First Responders. If you don't know, it's because I'm not particularly good at getting the word out to the book's target audience: bankers and the professionals that serve them.

Pretty niche group, so you think my targeting would be spot-on. Not so for a spreadsheet wonk!

But I have been out and about letting as many people know and engaging with industry friends and their audiences to get the word out. Not that I went on the late-night circuit like Matthew McConaughey promoting his book. Because my face was made for radio, except for one video (Ned Talks, linked below). Otherwise I kept my face behind the microphone in podcasts.

Here is the list of appearances with the appropriate links in case you want to listen or watch. I tried to bring something different to each one, as each of the podcasts' listeners are somewhat different and the podcasts' subjects varied. Try out one or more. Let me know what you think.

~ Jeff

The Squared Away book tour appearances:

Banking With Interest podcast hosted by Rob Blackwell (formerly managing editor at American Banker) and Interfi: ‎Banking With Interest: Why Banks Should Be Focusing on Building Core Deposits on Apple Podcasts

 

A live book review session with CULytics, a Credit Union focused consulting firm: Book Review Session - Squared Away: How Can Bankers Succeed as Economic First Responders | Jun 18 (culytics.com)

 

Financial Experience podcast hosted by Hunter Young of the HiFi Agency that serves banks and fintechs: The Keys To Staying Independent | Podcast | HIFI Agency

 

Street Talk podcast hosted by Nathan Stovall of S&P Global Market Intelligence: Stream Ep. 78 - The case to grow deposits when the world is flush with cash by Street Talk | Listen online for free on SoundCloud

 

This Month in Banking podcast (my own company did one featuring me and the book): Squared Away – How Can Bankers Succeed as Economic First Responders - The Kafafian Group, Inc.

 

Ned Talks: A video blog discussion between Ned Miller of 3^rd Act Consulting, a bank sales consulting firm: https://youtu.be/ryHQF-_QoG8

 

Banking Transformed podcast with Jim Marous of The Financial Brand: Is The Future of Community Banks at Risk? - The Financial Brand

And please consider reading the book: Squared Away-How Can Bankers Succeed as Economic First Responders. 

Ten percent of author royalties go to K9sForWarriors.org, who work to bring down the suicide rate among our veterans. 

Kindle

Paperback

Hardcover

Thank you!

 

Bankers: Seven Questions to Determine If You Have a Strategic CFO?

Ajit Kambil of the consulting firm Deloitte, in one of their Perspectives articles, asked seven essential questions to determine if the reader was or has a strategic CFO. I thought it provided great insights for Jeff4Banks readers, and I've accompanied the description of the seven questions with how it pertains to banking.

Seven Essential Questions for Strategic CFO's

1. How does your company plan to grow: M&A, organically (that is, by driving new or existing products to new or existing markets), or both? "The first and most straightforward question involves knowing the current strategy: What combination of these growth choices is your company currently committed to? The CFO's role then is to make sure that capital is available at the right cost for these choices to be profitable, and that the company has processes and decision making rules for capital allocation to support that growth." 

J4B Take: Many financial institutions that are large enough to be a buyer include organic growth and M&A in their strategic plans. It is natural to do so in a consolidating industry. And the true strategic CFO will bring ideas to the executive table that efficiently leverages capital to deliver the greatest risk-adjusted return on capital (RAROC).  At this writing, many bank balance sheets are flush with cash. Which could provide an opportunity to put significantly more cash in M&A transactions to stoke earnings accretion. But does your institution have enough capital to put another bank's assets on its books with issuing only 50% of the consideration in stock? The CFO could critically look at the balance sheet of both their institution and likely targets to recommend moves that could lead to a compelling offer to the target while maintaining a strong capital position. That would be extremely beneficial to the executive team trying to grow their balance sheet without having to turn away from acquisition opportunities. 

2. What are the dominant constraints that hold back your company's growth, and how might you overcome them? "The dominant constraints are the issues that prevent a company from reaching its potential. Consider a company with a heavy debt burden that was paying an interest rate more than twice the rates available to its competitors. Here the cost of debt capital was a critical constraint, given that competitors could finance growth through M&A and other strategies much more cheaply. In response, the CFO enabled a sale of a large stake in the company to a strategic investor, rasing capital and relaxing the 'finance constraint.' Other types of constraints include the lack of a needed or key product in the pipeline or simply the mind-set and culture of the company. Of course, some constraints are virtually impossible to overcome. For example, regulations in financial services impose new constraints on banks. Other than finding the efficient ways to comply, CFOs can do virtually nothing to change the regulatory constraint. Still, determining the dominant constraints is the first step for a CFO to take in order to relax or overcome them."

J4B Take: In this low interest rate environment with low loan demand, so many financial institutions issued subordinated debt at their holding companies to either downstream into their banks to support the next leg of growth or leave in the holding company to buy back stock trading at a depressed price. Or both. This debt is usually five years fixed rate, with attractive rates because of the interest rate environment, that flip to floating after the fixed period. How many bank CFOs created a plan to be in a position to redeem this debt once the five year period expires? Because it could serve as a constraint if interest rates rise, which they are likely to do, and we've used up the capital either for buybacks or to support growth. Did we keep the dividend steady so we can accumulate ever more retained earnings? Did we undertake a bankwide process improvement to ensure as we grew the bank achieved positive operating leverage that accelerated earnings and therefore capital? The strategic CFO, as captain of the capital planning ship, should have had a plan in place with multiple options to redeem this debt before it was ever issued.

3. What is the greatest uncertainty facing your company, and what can you do to resolve or navigate it? "Say the company has potential asbestos liability because the chemical was formerly used in some products, and the uncertainty around that liability is constraining the company's share price and keeping it from making aggressive growth plays. That doesn't sound like something a CFO can fix. But what if you were to go to the legal counsel and say, 'Let's figure out what it would cost to settle this potential litigation, and see, given our current cash flows and the low-rate environment, whether it's worth that price to get rid of that uncertainty.' Alternatively, CFOs can ask their finance, planning, and analysis (FP&A organizations to model the consequences of different outcomes, and then decide if they want to insure against risks arising from the uncertainty. Uncertainty can 'freeze' decision-making; CFOs can 'unfreeze' those decisions by gathering information to resolve the uncertainty, instituting a structure to navigate the uncertainty while managing risk through insurance, or developing a step-by-step approach to real-option investment as uncertainty is resolved."

J4B Take: The greatest uncertainty facing community banking is relevance. Change is happening faster than any other time in our careers, requiring quicker action, change implementation, failure recognition, and strategic investment. Yet we fall back on old habits such as submitting budgets that include the strategic investments to drive business model change, and the CFO, after aggregating departmental budgets during "budget season", pushes them back to department managers because they suspect "wish listing." Instead, the strategic CFO evaluates areas of the financial institution that consume operating expense and capital that are not central to strategy or profit generation, and recommends cutting them in order to invest for a long-term future. Don't send the budget back asking managers to sharpen their pencils and cut their wish list. Find the lowest return and least strategically significant areas and make recommendations to "stop doing this, so we can invest in that."

4. What is your greatest area of spend where there is a lot of uncertainty about return? "For example, a CFO of a consumer packaged goods company with a big chunk of spend going to advertising and promotion should ask, 'how can I get greater bang for my buck in my advertising and promotion spend, and how do I make headway on measuring returns from promotions to guide future spending?' Creating clarity and better disciplines on spend are often a source of quick strategic wins." 

J4B Take: I have written on these pages about building discipline and accountabilities around achieving the hoped-for economies of scale from mergers here, and building metrics and trends around achieving pricing advantage for what should result from that brand building budget your marketing executive says you need (read this). The CFO can be critical in taking hard to measure strategic initiatives and boiling them down to "what success would look like" so the management team can track and be accountable to themselves in making those investments pay off.

5. Are your company's financial and growth goals ambitious enough? What would we do differently if the company were an order of magnitude bigger? "Say your company's goal is to double its revenues, from $2 billion to $4 billion, and you're looking at a variety of projects to achieve that growth, but some entail a lot of risk because of the dollars involved. The CFO might look at this challenge and say, 'A $400 million project blowing up is going to do some serious damage to a $2 billion company, but not so much to a $20 billion company. So maybe our ability to invest in future growth is enhanced by increasing our scale not by two times but by 10 times through a series of rollups or acquisitions.' If you bring that option to your CEO and board, you've started a conversation that could be truly game-changing for the company. It is easy to get trapped in the present. But thinking substantively beyond existing constraints and limits can sometimes help identify plays that create dramatically new strategic options." 

J4B Take: I actually have two takes on this. 1) A strategic CFO should calculate and know a bank's "strategy value gap", which is the difference between the present value of the bank's strategic plan and what the bank can reasonably achieve in a sale. Aside from the straight math I just described, you have to add an "option to sell" on top of the present value of your plan because if the management team does not achieve plan objectives then the board still has the option to sell and that option has value. But the difference between that should be relatively small and within a board tolerance level. Calculating and communicating this number will keep a management team aspirational in strategy development, and focused in plan execution. Because a large strategy value gap may cause the board to hand over the keys to a more capable management team (i.e. sell the bank). So the financial and growth goals should be ambitious enough because the CFO knows what "ambitious enough" means. 2) What size must the bank be to make the human, technology, and other infrastructure investments to bridge a strategy value gap and remain relevant to bank stakeholders? That depends on the needed investments. The strategic CFO should be the arbiter of that conversation. Because if it's your investment banker, the size you have to be would be double what you are. No matter what you are. :) 

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6. What could disrupt your company, and what can finance do about it? "This is about envisioning a competitor's move, such as a merger or a new industry entrant that changes the nature of competition or a new technology that dramatically changes product offerings. Again, CFOs can ask if they themselves could use the likely playbook of a competitor to disrupt the industry and also leverage FP&A capabilities to model out disruptive scenarios and help frame responses." 

JFB Take: The market leader in mortgage origination in my home state of Pennsylvania is Quicken. Imagine if in the late 1990s bank CFOs projected a twenty year decline in mortgage market share driven by a piece of technology? Would we have made the investment to have a similar piece of technology and deliver an end-to-end paperless experience if the CFO made the right call or alerted us into making at least some call? We didn't. And we still may not have. We are not good at long-term strategic bets and we may not want to lay this at the feet of the CFO. But strategic CFOs should be running capital plans with "what if" scenarios such as "if we project multi-year declines in mortgage originations, how will we replace that activity, balances, and profit?" Much like they should be asking, and therefore running scenarios, "what if disruptors spark a multi-year decline in retail deposits?" I'd love to hear the head of retail refute or describe how you would replace that funding. But the conversation should start with your strategic CFO what-if testing.

7. What would you like your company to stop doing? "Finally, are there underperforming business units or a part of the company that does not generate required returns, or customers who are not profitable? If there isn't a way to scale the business to increase returns, it may be best to dispose of it and free capital and management resources to grow more high-potential businesses. Similarly, choosing not to serve unprofitable customers or to increase prices to them may increase long-term returns." 

J4B Take:  Many financial institutions evaluate the size they must be to make the investments discussed in "5" above to be relevant to their stakeholders. But what are they doing now that they can stop doing to pay for strategic investments? And when evaluating where to invest, what has the greatest potential to generate profit? Perhaps it's something you are doing now that you want to do 4x more of that is generating excellent ROEs. The where to invest and how to fund it are key questions that the CFO should take the lead in answering.

After reading the seven essential questions for strategic CFOs, and my take as it relates to banking, does your bank have a strategic CFO?

 

~ Jeff

Note: If bankers do not have the management reporting to answer "7" and know which lines of business, products, or customers are delivering the best profit, they should give me a call. My firm does that for you.

And don't forget my book: Squared Away-How Can Bankers Succeed as Economic First Responders. 

Ten percent of author royalties go to K9sForWarriors.org, who work to bring down the suicide rate among our veterans. 

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Paperback

Hardcover

Thank you!

 

 

Bank Customer Lifetime Value

Who are your target customers? Answer: XYZ

Why are they your target customers? Answer: They are our most profitable customers.

May I see your profitability reports that show this? Answer: *crickets*

Is "most profitable" the right answer? Aside from my skepticism that the financial institution actually calculates who their most profitable customers are. But in doing profitability reporting for decades, I feel comfortable saying that most commercial-focused financial institutions' most profitable customers are commercial real estate investors. Not small mom-and-pop real estate investors. The ones with the big balances.

Targeting them would likely yield a very profitable bank. But would it be a valuable bank? It is highly competitive in the large commercial real estate space. Not only are there community financial institutions chasing that business, but large banks, conduits, insurance companies, loan brokers, etc. The competition is, well, not very "blue ocean" like (compete where the competition isn't). 

I'm not down on commercial real estate. Any balanced balance sheet should have its fair share of investor CRE to boost profits. But to boost value, I ask again, who are your target customers?

In comes what experts deem "lifetime value" (LTV). Can we categorize, and generalize, customer segments to predict what segment delivers the greatest LTV? Because if we consider spot profitability, we should target CRE. It is likely the reason why so many bank balance sheets have concentrations in this product. 

Let's take a doppelganger customer segment: Recent college graduates with high earnings potential. We're not talking philosophy majors here. I already have enough of them fumbling my coffee order. I'm talking the docs, engineers, accountants, cyber security, et al. The customers that SoFi targeted out of the gate.

See the table below for our recent engineering major grad, who is working as a junior engineer for an environmental engineering firm. Four years after becoming our bank's customer, he/she breaks out on his/her own. 

As you can see, the Total LTV in the top table shows a pretty profitable customer, and likely customer segment. But if you look at the spot profitability in Year 1 of the bottom table, our doppelganger customer doesn't look so attractive. Profits actually decrease in years two and three. THIS is why estimating LTV of identifiable customer segments is so important to strategic decision making in financial institutions. Not only must we calculate LTV by segment, but we must also compare to external data to ensure there are enough of these "households" in our markets so we can build critical mass.

There are business models that span the country for their targeted customer segments. In addition to the already mentioned SoFi, Live Oak Bank comes to mind. They started as an SBA shop focused on business segments that were recession proof, like dentists and veterinarians. And searched the entire country for them.

Most of us are geographic focused. But that doesn't mean we shouldn't build our infrastructure: the people, technology, and physical locations, to differentiate ourselves with those customer segments that deliver superior LTV and are in abundant supply in the markets we choose to serve.

Do you calculate LTV?

~ Jeff

And don't forget my book: Squared Away-How Can Bankers Succeed as Economic First Responders. 

Ten percent of author royalties go to K9sForWarriors.org, who work to bring down the suicide rate among our veterans. 

Kindle

Paperback

Hardcover

Thank you!

Banking's Execution Imperative

Announcer: Spain had 85% possession against Sweden and did not score.

The strategy drawn up by the Spanish side played out... mostly. What Spain didn't do is execute in their attacking third to put one in the net. It doesn't matter if you had 85% possession. The scoreboard matters.

So it goes with banking. So often management teams put in the work to design a winning strategy. They march out of that planning retreat energized. And when their strategy consultant re-engages next year to see where they are on execution, there is disappointment. The economy, interest rate environment, or their "day job" held them back. And the institution didn't move forward. They didn't execute in the attacking third.

I realize the irony about me writing on execution when one segment of my book, Squared Away-How Can Bankers Succeed as Economic First Responders was "No amount of good execution will help a bad strategy." But if we don't get serious about executing on the well thought out strategies we worked so hard to develop, the scoreboard will reflect it. And we can't expect our competition to put up a zero so we stay level at nil-nil. 

I'm working this soccer analogy to the fullest.

Here is what I mean. Schmidlap National Bank, our hypothetical community bank, researches their markets, customers, competitors, strengths and weaknesses and determine that they can distinguish themselves as the best business bank for businesses between $1 million - $10 million in their markets. So they set out to make it so.

They debate what success would look like. To be the best business bank, they must baseline what their current business customers think of their bank, its products, and its service. So a strategic initiative is to baseline through survey, and repeat at least semi-annually. To align strategy with culture, they make executive and mid-level performance reviews within the departments that serve businesses dependent on continuous improvement in how your business customers view the bank.

Additionally, the strategy team thinks they should be paid for being the "best" in terms of pricing. As such, they identify top-quartile (among market peers) yield on loans to be their aspirational goal. And again, executive performance reviews and/or bonuses are linked to achieving top quartile yield on loans while achieving market average credit quality metrics. In other words, they can't deliver yield by chasing poor credits. 

But there's more. In order to align the organization with this strategic aspiration, lender bonus criteria is changed from volume to continuous improvement in the individual lenders' spread. So now, lenders' incentives are closely linked with strategy. They demonstrate continuous improvement in customer satisfaction scores, and continuous improvement in their portfolio spreads, and they have a good year. 

Each strategic initiative, inextricably tied to strategy, serves to set the table (i.e. culture) for successful strategy execution. And the initiatives are strategic. Not "replace the departing loan assistant" or "upgrade phone system." These are business as usual "to-do's". They are someone's day job.

But for bank executives, strategy execution is your day job.

Don't be Spain.

~ Jeff

And don't forget my book: Squared Away-How Can Bankers Succeed as Economic First Responders. 

Ten percent of author royalties go to K9sForWarriors.org, who work to bring down the suicide rate among our veterans. 

And don't forget my book: Squared Away-How Can Bankers Succeed as Economic First Responders

Kindle

Paperback

Hardcover

Thank you!

Memorial Day: Remember Maurice "Maury" Hukill

In 1975, a bloody civil war erupted in the country of Lebanon between Palestinian and other Muslim guerrillas and Christian groups. During the ensuing years, Syrian, Israeli and United Nations interventions failed to resolve the factional fighting and the resulting instability and bloodshed. 

In August, 1982, a multinational force, including 800 U.S. Marines, were ordered to Beirut to help coordinate a Palestinian withdrawal. They left in early September, but the vacuum that resulted from their departure culminated in a massacre of Palestinians by a Christian militia. So the international peacekeepers returned in force at the request of Lebanon by the end of September at the objection of Syria and Iran. For the next year the peacekeeping force was peppered by snipers, improvised explosive devices, and suicide bombers.

Maurice "Maury" Hukill was born and raised in Elizabethtown, Pennsylvania. A hamlet in the Scots-Irish settled area of western Lancaster County and epicenter for the Mars Chocolate Company's North American production of Dove Chocolate bars. 

Maury attended Virginia Tech, and in 1981 received his degree in forestry and wildlife management at VT's College of Natural Resources and Environment. Although he did not go on to make use of the degree. Instead, he followed his father, Hank Hukill Jr. into military service. Hank was a U.S. Naval Academy graduate, a nuclear engineer and a submariner. After his naval career, Hank went on to serve at the Three Mile Island nuclear power plant, and was part of the team to restart the plant after the 1979 mishap. TMI was near Elizabethtown.

Maury chose the Marines, and went to officer candidate school to earn his commission. A regular suburban kid from my hometown volunteering to serve his country.

He was a 2nd lieutenant in the 24th Marine Amphibious Unit from Camp Lejeune, North Carolina, that was dispatched at the request of Lebanon to Beirut to keep the peace in the midst of factional fighting, religious zealotry, and regional strife.

At 0622, Sunday morning, on October 23, 1983, a non-Lebanese, terrorist driven stake bed truck loaded with explosives equivalent to 21,000 pounds of TNT turned onto an access road leading to the Marine airport compound. It crashed through a barbed-wire fence. The truck passed the sentry post and since the sentries were operating under strict rules of engagement, did not have their firearms magazines loaded, and therefore could not fire upon the truck until it barreled past them. 

The truck, driven by an Iranian national, did not stop until it drove through the front entrance of the BLT building, which was housing 2LT Hukill's unit. Most were still asleep. The blast occurred almost immediately. One survivor said "I don't think there are words in the English language to describe the magnitude of the blast." It was the largest non-nuclear explosion in history. The building collapsed.

The explosion killed 220 Marines including the 25 year-old Hukill, 18 sailors and three soldiers, making it the deadliest single-day death toll the US Marine Corps had seen since the Battle of Iwo Jima during WWII, and the deadliest single-day death toll the Armed Forces had seen since the first day of the Tet Offensive during the Vietnam War. It was also the deadliest terrorist attack on Americans prior to 9-11.

Minutes later, a second suicide bomber drove another truck bomb into the nearby Drakkar building, where French troops were stationed, resulting in the deaths of 58 paratroopers and six civilians. 

A Beirut Monument dedicated to the U.S. service members who lost their lives is located in Jacksonville, North Carolina, where Camp Lejeune is located. 

"Our first duty is to remember..."

While you are enjoying Memorial Day Weekend finally getting together with family and friends, I ask you to remember Maury Hukill and all of his comrades that gave their last full measure of devotion on that terrible day in 1983 in Beirut, Lebanon.

~ Jeff

Research

Beirut Memorial:

8A894694CA09D74F48E5AF790B15DA11.beirut-memorial-program-new-.pdf (beirutveterans.org)

Marines of Beirut video from the Marine Corp Reserve:

https://youtu.be/pqfnJptZEV0

Virginia Tech honors 2nd Lt Maurice Hukill:

University to honor U.S. Marine 2nd Lt. Maurice Hukill at Pylon Dedication Ceremony | Virginia Tech Daily | Virginia Tech (vt.edu)

History "This Day in History":

Beirut barracks blown up - HISTORY

Patriot Connections:

1983 Beirut Bombings – Deadliest day for Marines since Iwo Jima | Patriot Connections

Defense archives listing the fallen:

DefenseLink.mil - Special Report - Beirut Barracks Bombing

Beirut Remembered video:

https://youtu.be/iOqZz_oEdig

Excess Liquidity, Low Rates, and Branching. My Answers to Jeff Davis' Questions

S&P Global Market Intelligence Principal Analyst Nathan Stovall recently interviewed Mercer Capital's Jeff Davis on the Street Talk podcast regarding the thorny banking issues of the liquidity glut, persistently (or perpetually?) low rates, and the branch costs millstone. I highlight Jeff's comments, and offer some solutions in this video blog.

Enjoy!

~ Jeff

Here is the YouTube link to my comments in case the video does not play on your device:

https://youtu.be/8erI7qDMb2g

Street Talk podcast link: 

Excess liquidity, low rates leave banks between a rock and M&A | S&P Global Market Intelligence (spglobal.com)

And don't forget my book: Squared Away-How Can Bankers Succeed as Economic First Responders

Kindle

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Hardcover