2007 Best in Banking · In Trying Times for PNC, Industry Jim Rohr is anything but flashy, but the...

2007Best in Banking

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Banker of the Year 2James E. RohrPNC Financial Services

Community Bankers of the YearTHE ADVOCATE

Robert A. Glassman Wainwright Bank and Trust 10THE RETAIL PERFORMER

William S. StuardF&M Bank 15THE BUILDER

Thomas S. WuUCBH Holdings 18

Innovator of the Year 25Elizabeth R. JamesSynovus Financial

Lifetime Achievement 33L. William Seidman

Year in Review 38

Year in Quotes 48

Editor-in-Chief: David Longobardi

Managing Editor: Richard Melville

Assistant Managing Editor:Barbara A. Rehm (Project Editor)

Director of Editorial Design/Production: Debbie Fogel

Photo Editor: Michael Chu

Artist: Virna Valdez

President, Banking Group: Jeff Scott

Publisher: Brendan Amyot 212-803-8895

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Customer Service: [email protected]: Joylyn Yaw 800-367-3989

Contents

Published as a supplement to American Banker, a SourceMedia publicationOne State Street Plaza, 27th floor, New York, NY 10004www.americanbanker.com/best

2 AMERICAN BANKER / BEST IN BANKING / NOVEMBER 2007 www.AmericanBanker.com/best

BANKER OF THE YEAR

Jim Rohr Makes Right ChoicesIn Trying Times for PNC, Industry

Jim Rohr is anything but flashy, but the company he runs is outshin-ing its rivals.

As industry giants announced demoralizing writeoffs, PNC Financial Services Group Inc. posted rock-solid third-quarter results and prom-ised investors more of the same in 2008. The Pittsburgh company has expanded — with deals in Washington, Baltimore, and Pennsylvania — while rivals have retrenched under crushing credit problems.

Two simple principles inform Mr. Rohr’s strategy: Get paid for the risks PNC takes, and never forget that good times don’t last.

“One of the benefits of being one of the senior CEOs, if you will, is that I have been through a couple of cycles,” he said. “We were able to maintain discipline across the company, and I think that was the thing that really got us through.”

While true, that’s not the full story.Mr. Rohr, 59, captained the $131 billion-asset PNC through a

wrenching regulatory entanglement, and rather than withdraw he leveraged beefed-up risk management capabilities to buy the troubled but attractive Riggs National Bank in Washington. Since then PNC has bought another bank and announced deals to buy two more.

For his aggressive yet disciplined leadership of PNC, Mr. Rohr is American Banker’s 2007 Banker of the Year.

Mr. Rohr has indeed seen his share of economic turmoil, all from the vantage point of PNC. After joining its management development program in 1972, he worked in various departments before becoming a vice chairman in 1989. By the following year he was the company’s president, and he was named chief operating officer in 1998. He became the CEO in May 2000 and the chairman one year later.

He said that as far back as the late 1990s, PNC’s management was convinced that credit of all sorts had simply become too cheap.

“In the late 1990s and early 2000s we were net sellers of credit risk — in fact we downsized our credit book by $50 billion,” he said. “We didn’t think we were getting paid for it.”

PNC began to take risk management more seriously. “The communication went out there that risk management was

everyone’s job,” Mr. Rohr said. “We changed the risk management profile of the company and adopted a very strong risk management culture with a moderate risk profile.”

The result: PNC stayed well away from two of the hottest areas of the credit markets in the early part of the decade: syndicated financing of leveraged buyouts and subprime mortgage lending.

As the mortgage boom peaked in the early part of the decade, PNC caught flak from investors, Mr. Rohr said.

“In 2003, 2004, and 2005, investors would come to us and say, ‘You are not growing net interest income as fast as others,’ ” he said. “And we said that’s because they are taking a lot of interest rate risk or credit risk, and we don’t think they are getting paid for that risk.”

PNC’s stance was made easier to justify by its ability to match com-petitors’ profit growth by other means.

“We were able to grow our noninterest income 9 or 10% a year and were growing net interest income 5 or 6, so we were keeping up with everyone in terms of earnings growth, but with a different mix of busi-ness,” Mr. Rohr said. “Because of the diversity of revenue streams we had, we weren’t reliant on a single activity. About 60% of our revenue was in fees, so we weren’t wedded to net interest income.”

In the end, he said, the company’s reservations about LBOs and subprime were vindicated.

“Like a lot of things, things are good until they’re not. Subprime was good until it wasn’t, and large LBO exposures were good until they weren’t,” he said. “So frankly, we maintained discipline through that whole period of time, and that has put us in a better place today.”

Of course, the past decade at PNC has not been without its difficulties.

In 2002 the Securities and Exchange Commission accused it of, among other things, making “materially false and misleading” state-ments when it reported its 2001 fourth-quarter and full-year earnings. At issue was the company’s attempt to move $762 million of distressed loans and venture capital assets into an off-balance-sheet entity. The Federal Reserve Board found that PNC had understated its continuing exposure to those assets, which resulted in the earnings hit.

In a settlement with the Justice Department in 2003, PNC agreed to pay $25 million of penalties and to set aside $90 million in an investor restitution fund.

Though the incident was publicly embarrassing and financially pain-ful, it did no serious damage to the company, which PNC’s president,

BY ROB GARVER

“Large LBO exposures were good until they weren’t,” Rohr says. “So frankly, we maintained discipline through that whole period of time, and that has put us in a better place today.”

AMERICAN BANKER / BEST IN BANKING / NOVEMBER 2007 3www.AmericanBanker.com/best

“I’ve been told by a number of people that they wish they had bid higher” for Riggs, Rohr says. “That always gives you a good feeling.”

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Joseph C. Guyaux, attributes to Mr. Rohr’s handling of the crisis.

“Jim is very interesting, affable, and very caring and sincere about everything he does. It was those traits that, during our toughest time, made him able to keep the team together,” Mr. Guyaux said. “He kept himself and kept us focused on what we could control, and not on what we couldn’t.”

Mr. Guyaux said it was Mr. Rohr who decided that rather than hun-kering down and merely getting through the regulatory trouble, PNC would find a way to “use this as a platform for growth.”

As it became clear that the SEC investigation would require substantial changes to PNC’s risk management, the company decid-ed it would exceed whatever standards regulators demanded, Mr. Guyaux said.

“Jim saw that if we could, with confidence, manage risk better than others we could use that to our advantage to grow faster,” he said.

In addition to beginning the companywide drive toward tight-er risk management, Mr. Rohr sought out and hired William S. Demchak, then the global head of structured finance and credit port-folio for JPMorgan Chase, citing his expertise in risk management as a key in the hiring decision. (Mr. Demchak, now vice chairman and head of corporate and institu-tional banking, is widely viewed as Mr. Rohr’s likely successor.)

A case could be made that PNC’s regulatory problems, which entailed working closely with reg-ulators for several years, gave it an advantage when bidding for Riggs in 2005. With the target crippled by a money laundering scandal, many saw buying Riggs as a dicey proposition, and PNC’s share price suffered when the $652 million

deal was announced.PNC persevered, even nego-

tiated a lower price, and Mr. Rohr said its ability to work with regulators helped. “They were confident that we understood the

safety-and-soundness issues that needed to be dealt with at Riggs, and they were confident that we could deal with them.”

Following a transition of the Riggs branches to the PNC brand

that was accomplished, by all accounts, with nearly unparalleled smoothness, the doubters have been proven wrong, and some of PNC’s competitors may even have come to regret that they did not

pursue Riggs more vigorously.“There were a number of other

bidders, and I’ve been told by a number of people that they wish they had bid higher,” Mr. Rohr said. “And that always gives you


a good feeling.”The successful acquisition of

Riggs launched a series of deals for PNC, including three this year that started with the highly respected Mercantile Bankshares Corp. of Baltimore in March, which added 500,000 consumer accounts in Maryland, Delaware, Washington, and Virginia. The conversion of 231 Mercantile affiliate branches to PNC Bank in September 2007 made PNC’s bank branch system one of the largest in Maryland.

“If we hadn’t gone through what we went through as a team and worked our way through it, I don’t think we would ever have bid for Riggs,” Mr. Guyaux said. “If we had never bid on Riggs, maybe we’re not the preferred bidder for Mercantile. … Who knows?”

PNC generated some of the capital it used to finance acquisi-tions from astute moves with the asset manager BlackRock. PNC bought BlackRock for $240 million in 1995, adding it to its own asset management operation.

“We bought BlackRock when it was a fixed-income manager, and subsequent to that we took our liquidity business and our equity business from our asset management activities at PNC and merged them into BlackRock, which created a $70 billion-plus asset manager almost right away and gave them a broader product mix than they had before,” Mr. Rohr said.

He said a primary goal after the acquisition was to keep the team that had been managing BlackRock in place for as long as possible. This led to the decision to take the company public in 1999.

“The reason we took them pub-lic was not so that they could acquire others, but so that they

could be paid like asset manag-ers, not like bankers,” he said.

Acquisition opportunities arose all the same. In 2006, BlackRock bought Merrill Lynch & Co. Inc.’s investment management busi-ness, which pushed assets under management to more than $1 trillion. Because new shares were issued in the deal, PNC’s 44.5 mil-lion shares in BlackRock became a minority stake at 35% of out-standing shares, with Merrill get-ting a 49% stake.

The value of those shares has jumped significantly, and the return to PNC shareholders has been significant.

Because PNC surrendered its status as majority shareholder, it was able take BlackRock off its balance sheet, freeing up billions of capital that it would use for further acquisitions.

This summer PNC announced agreements to buy Yardville National Bank in Hamilton, N.J., and Sterling Financial Corp. in Lancaster, Pa. On completing those deals, which it expects to close by yearend, PNC will have 29,500 employees, 1,174 branch-es in eight states, and assets of $137.3 billion.

The growth has come as PNC is posting quarterly numbers that demonstrate just how much it has set itself apart from its competi-tors in terms of credit quality. In the third quarter, PNC hit its earn-ings targets, and nonperforming assets fell 16% from the previous quarter, compared with an aver-age increase of 31.5% for peer institutions. On a year-over-year basis, nonperforming assets at PNC were up 8.1% in the third quarter, compared with a peer-group average increase of 68.5%.

Gerard S. Cassidy, the man-aging director of bank equity research with Royal Bank of

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Canada’s RBC Capital Markets, gave Mr. Rohr credit for a loan portfolio that is outperforming those of others in banking.

“PNC is head and shoulders above those companies today, because they started to exit the higher-risk businesses five years ago — they just weren’t willing to accept the lower spreads in higher risk areas,” Mr. Cassidy said.

He also applauded Mr. Rohr’s decision to move forward with the lucrative BlackRock-Merrill deal. “Those two decisions have benefited shareholders dramati-cally in the last few years and are likely to get PNC through this downturn better than many of its competitors — which may leave it in a position to buy some of them at attractive prices. I think you have to bestow upon him kudos for leading the company in the direction it’s heading today.”

For a banker whose success in recent years has come in large part from preparing for the worst, Mr. Rohr is surprisingly confident that the credit crisis won’t result in catastrophe for the rest of the banking industry.

“This is a unique time,” he said. “We do have a credit cri-sis, mostly around liquidity and credit, though we don’t have a recession. So the companies are doing fine. It’s not an earnings issue, but we have losses in syn-dicated portfolios which are very large. Basically what happened is we overfinanced, we were overly aggressive in our syndication activities … as an industry.

“The same thing is true for subprime. We overfinanced the residential housing market, and frankly it has to come back in line. We lent money, as an industry, too aggressively.”

The “most troublesome thing” facing the credit markets, he said,

is the ongoing resetting of rates for the millions of adjustable-rate mortgages made over the past several years.

“It makes it difficult to price subprime paper today,” he said. “I think it will take time to work its way out.”

But on the whole he said he does not believe the crisis will drag the broader economy into recession.

“It is a really vibrant economy,” he said. “We’ve had oversup-ply of homes before, so I am fairly optimistic that we will work our way through. It will slow us down, make no mistake, and all of us will be hit in some way; no one is immune to the impact. But the economy is strong and capital expenditures are still growing at a very nice pace,” and “exports are growing more rapidly than ever, so I think there are other pieces of the economy that will make up for that, that will carry us through without a recession.”

If Mr. Rohr is right, and the credit markets’ issues work them-selves out in the relatively near future, it seems inevitable that some of the larger companies will see PNC as an attractive takeover target.

Is there room for $125 bil-lion-asset regional banks in the United States when the dominant nationwide institutions are so much bigger? What would hap-pen if PNC got an offer?

“We have a very diverse board of directors,” Mr. Rohr said. “It’s not a bunch of guys who live within 10 miles of my house. The board would be, I think, very respectful of a big offer for the company. But really, that’s not the plan at all. The plan is really to keep performing for our share-holders. We think because we have performed, we have earned

the right to remain independent.”Besides being able to afford

the talented people it takes to run its operation, he said, there are two keys to making it as a large regional bank.

“One of the issues is how well are you positioned in the busi-nesses that you are in? The other is: Can you afford to maintain the technology to keep up? Those two questions I think will dictate a lot of whether you are success-ful or not.”

He points out that PNC is at or near the top in market share in its business lines, including small-business treasury management, middle-market business lending, and large corporate banking.

“In the places where we have elected to play, we have done very well.”

As for technology, he noted that CIO magazine recently named PNC one of the 100 top U.S. tech-

nology companies. The only other bank to make the list was Wells Fargo & Co.

As for the people?“It is up to us to manage the

future,” Mr. Rohr said. “We think we can win in the places we focused. And from where I sit now, I think we can afford the people.”

There are not many banks like PNC left — one that is intimately connected to its home city.

From his wood-paneled office on the 28th floor of One PNC Plaza, Mr. Rohr can look across the Allegheny River and see right over the center-field fence into PNC Park, where the Pirates play.

Surrounded by baseballs embossed with the PNC log, a football signed by Heisman Trophy winners from his alma mater, Notre Dame, and the photos, awards, and other trinkets testifying to his three decades with the company,

Mr. Rohr proudly claims PNC owns more green buildings (certified as environmentally friendly by the U.S. Green Building Council) than any other company in the world, and is building more — including an office in Washington that will be the world’s largest green office building.

The company is also three years into a 10-year, $100 mil-lion program, known as Grow Up Great, that promotes early child-hood education in the communi-ties where PNC operates. With three children and four grandchil-dren of his own, Mr. Rohr took a leadership role in the program, immersing himself in the details of early childhood education and then putting himself forward as a spokesman for both the PNC pro-gram and the cause in general.

Mr. Garver, who covered regulatory issues as an American Banker reporter

from 1999 to 2003, is a freelance writer in Springfield, Va.

Throughout a regulatory crisis, PNC president Joseph Guyaux says, Rohr “kept himself and kept us focused on what we could control, and not on what we couldn’t.”

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COMMUNITY BANKER OF THE YEAR: THE ADVOCATE

Because his Boston company champions everything from gay rights to homelessness to envi-ronmental protection, Robert A. Glassman calls himself “a social activist disguised as a banker.”

The bulk of Wainwright Bank and Trust Co.’s commercial loan portfolio finances socially respon-sible community development projects. Just as impressively, Wainwright hasn’t had a single chargeoff on those loans, and its past-due loans can be counted on one hand.

Wainwright continues to renew its model, adapting its products and services to meet customer needs, like a new certificate of deposit that supports fair trade pricing for Third World farmers.

For proving the adage that a company can do well by doing good,American Banker has named Mr. Glassman, Wainwright’s founder and a co-chairman, one of its 2007 Community Bankers of the Year.

In an interview, Mr. Glassman, 65, insisted Wainwright’s busi-ness model has not held back profits or growth.

“There’s nothing over the years involving our approach to social justice or to the nonprofit commu-nity that has inhibited our ability to be profitable,” he said. “If any-thing, it’s been very supportive of that side of it. The two absolutely mutually reinforce one another.”

The numbers back him up. Since Wainwright opened in 1987, its assets and its customer base have grown steadily. After 10 years in business it had about 8,000 deposit accounts and $300 million of assets. Today it has 40,000 accounts and more than $900 million of assets.

Wainwright’s share price has followed a similar track. In March 1992 the stock was selling at $1.87 a share. Over the past year it has grown 23%, to roughly $12.85. The S&P 500 rose roughly 10% over the same period.

Gerard Cassidy, the managing director of bank equity research for Royal Bank of Canada’s RBC Capital Markets, credited the stock gains to Wainwright’s con-servative underwriting.

“When you look at their loan mix, they don’t have the high-risk loans on their books that are

causing the problems for every-body else,” Mr. Cassidy said in an interview. “With the types of problems we’re having in bank-ing today, investors are flocking to safe havens, hideouts, stocks they know they’re not going to get hurt in. And Wainwright fits the bill.”

But like most banking compa-

nies, Wainwright limped through the third quarter. Its net income fell 29.2% from a year earlier, to $1.3 million, and earnings per share dropped 28.6%.

“We’re subject to the same forces that impact everybody else,” Mr. Glassman said. “As a bank, a large part of your balance sheet is subject to the gravita-

tional pull of forces in the indus-try that you have no control over. So your net interest margin gets squeezed by events that occur far away from you.”

But Wainwright takes the long view, he said. “No one year’s earnings are going to cause us to rethink what we’re doing.”

Its credit quality is enviable.

Glassman says the McCarthy hearings, the Vietnam War, and the civil rights movement “set in motion a set of thinking” that contributed to Wainwright’s strategy.

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Glassman’sFormula: SocialResponsibilityAnd Clean Credit

BY DAVID BREITKOPF


The 12-branch Wainwright focus-es on commercial loans, particu-larly to nonprofits.

“We’ve done over $600 mil-lion in community development lending, and we’ve not lost a penny of it,” Mr. Glassman said. “There’s a kind of tenacity, if I can call it moral tenacity [among borrowers], to stick with it and see it through because they come to the project … working for a cause,” he said. “We’ve found they’re able to work through any bumps along the road. It’s just been a terrific piece of moral col-lateral that’s just not present in other lending.”

John Plukas, Wainwright’s

other co-chairman, said too many bankers view these types of com-mercial loans solely as a way to earn Community Reinvestment Act credit.

“We saw opportunity when others saw obligations,” Mr. Glassman said.

The two men did not intend to change the world when they started Wainwright, but its focus on progressive issues led to such a fiercely loyal and profitable cli-entele that it ended up dictating the company’s strategy, he said.

“We didn’t set out to build the identity. We set out to build the bank, and when we did these other things, the identity and

the brand came to us,” Mr. Glassman said.

Still, he was a young man when his interest in progressive social causes was piqued. He traces it to his military service in the Vietnam War, the civil rights marches of the early 1960s, and even earlier to the mid-1950s, when he tuned into the McCarthy Senate hearings.

“I was not a direct participant in the civil rights movement, but I certainly had an awful lot of my views formed by what was taking place. My platoon [in Vietnam] had a greater percentage of people of color than the society I rejoined going to Harvard Business School

and [later in] corporate America,” he said. “The McCarthy hearings that I watched as a child formed my viewpoint of impinging on civil liberties, and each one of those helped to set in motion a set of thinking that probably provided the underpinning for a lot of the progressive ideas that Wainwright Bank is known for.”

It all began with a loan in 1988 to the Pine Street Inn, a homeless shelter than has received a dozen loans in all from Wainwright.

It created its community devel-opment loan department in 1992, and the next year Wainwright made its first loans for HIV/AIDS housing. It began offer-

ing same-sex domestic partner benefits in 1994, and it persuad-ed the Massachusetts Bankers Association to offer similar ben-efits for its 160 member banks.

“We took it one issue at a time,” Mr. Glassman said of Wainwright’s evolution. “The bank didn’t start from day one as a progressive institution. It probably resembled many other institutions the day it opened. But it evolved over those early years with the support of our board into the progressive institution it is today.”

His company continues to find new ways to meet customers’ needs. For instance, in 1999 it launched CommunityRoom.net, a free Web site for every nonprofit client. It allows them to accept online donations from anywhere in the world; about $1 million of donations are generated through this Web site annually.

In 2001, Wainwright introduced its first “Green Loan” that offers reduced interest rates for energy efficient buildings and homes, and it has been pursuing green branches itself.

“Every decision you make in a branch from the flooring to furni-ture to the fixtures to the energy has an environmental answer or has a conventional answer,” Mr. Glassman said. “There’s a grow-ing movement in the country that thinks this should be a part of the equation, and banks should have a role in it.”

Wainwright itself is a multi-cultural tapestry; about 60% of its employees are women, and nearly 50% of its officers are women; over 30% are minorities, and about 10% are gay.

Mr. Glassman and Mr. Plukas split work at the company. Mr. Plukas oversees investments and marketing. Mr. Glassman is the

The bulk of Wainwright’s commercial portfolio finances community develop-ment projects, but Glassman can count its past-due loans on a single hand. Borrowers put up “moral collateral that’s just not present in other lending.”

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public face. Jan Miller is the president and chief executive.

Mr. Glassman has “a combina-tion of ingenuity, inventiveness, and doggedness,” Mr. Plukas said in an interview. “Those are very desirable traits in any walk of life, but particularly when you’re building” a business.

“I absolutely support all those activities,” he said. “But as we joke around the office, some-body’s got to clean up behind the elephant. He’s accomplishing all of his elephantine goals, and I clean up and make sure all the details work and the trains run on time.”

The two have been business partners for 35 years. Mr. Plukas hired Mr. Glassman out of Harvard Business School in 1969, and the two held various investment banking jobs. In 1975 they started HCW Inc., a publicly traded oil and gas company, which they sold in 1986. With the proceeds, the two started Wainwright.

How large can a banking company that prides itself on social justice issues become? Mr. Glassman said that one like Wainwright could be “vastly larg-er,” and that there are at least 20 other cities with similar “progres-sive profiles” as Boston where such a company could thrive.

And Mr. Plukas said that the Northeast’s population growth has been stagnant at best over the past 15 years, so “every point of growth we achieve comes out of someone else’s balance sheet, and that’s just more dif-ficult to do.”

Nearly 20 years ago Wainwright began presenting a Social Justice Award, and at this year’s ceremo-ny Nov. 5 it honored Jim O’Connell and his organization, Boston Health Care for the Homeless. With a loan from Wainwright,

the group will renovate Boston’s former morgue into a health-care center for homeless people.

“You can imagine our shock when we went to Wainwright Bank, and they actually courted

us,” Mr. O’Connell said. “They wanted our business. Nobody wants our business.”

At a reception where the awards were presented, he recounted an evening when Mr.

Glassman joined him on the streets to help homeless people.

“I couldn’t help thinking that when Bob was out that night, all he saw was possibilities and connections and a world that

really could be just for all,” Mr. O’Connell said. “And I realized that when you’re out with Bob, he just radiates, and there’s an effer-vesce, and the life is just much better when he’s around.”

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The Road Less Traveled Led ToSuccess For This Tennessee Banker

hen a rural $22 million Tennessee bank decided to venture down the road in pursuit of growth and prosperity, it moved into a dynamic new market. Sammy Stuard, leader of the pack at F&M Bank, knew that getting ahead would not be purely about speed. It would also be about handling the corners ... having power for the uphill climbs ... fuel to go the distance ... and enough horsepower to pull past competitors.

Today, F&M Bank has $600 million in assets and is #1 in deposits for its primary market. With

Sammy Stuard at the controls, F&M continues to navigate unexplored roads, bringing its unique brand of banking to customers who like coming along for the ride!

F&M Bank’s New Headquarters in Clarksville, Tennessee

Member FDIC

William S. “Sammy” Stuard – F&M Bank President & CEOHonored by American Banker as a 2007 Community Bankerof the Year

www.myfmbank.com


COMMUNITY BANKER OF THE YEAR: THE RETAIL PERFORMER

An Ever-Expanding Marketing Menu at F&MChicken salad may be the

secret ingredient in F&M Bank’s recipe for success.

The $600 million-asset Clarksville, Tenn., bank’s deposits have grown 570% since 1992, and it all began with humble lunches for small groups of wealthy elderly women. Today social events sponsored by the bank are the hottest ticket in town, and its largest deposi-tors often are granted the best access.

F&M’s president and chief executive officer, William S. Stuard, credits a work force that has been willing to try anything to help the bank prosper.

“Community banking is not in the numbers. It’s in the attitude,” he said in an interview. Success rests on “empowering employ-ees to just take a common-sense approach to deal with their cus-tomer to try to provide a service better than somebody else can.”

American Banker has named Mr. Stuard a 2007 Community

Banker of the Year for F&M’s impressive retail performance built on event-led marketing. Defying the odds against small banks, the F&M Financial Corp. unit also has a sophisticated reward program for customers who have large balances or con-duct a lot of business with the bank.

It’s not beyond quirky mar-keting moves, either. Over the summer F&M Bank rotated its “FunMobile” van among the park-ing lots of its 14 branches to pass

out free hot dogs, sodas, and popcorn. “You’d be surprised at the number of people that would make a trip to the bank for that,” Mr. Stuard said.

It’s all part of the brand he is trying to build at F&M. He wants customers to come to the bank not just for its products and services, but also because con-ducting all their business there provides an added value.

“It’s just like me with my ‘AAdvantage’ miles” from American Airlines, he said.

“You’re real hard-pressed to get me to fly on other airlines. … It’s important to me that I am getting some other value besides just sit-ting in that seat and flying across the country.”

After the ladies who came to the first lunches started making large deposits, F&M planned big-ger functions for wider audienc-es, first at the local country club and later in a leased corporate lodge. In March the bank moved its headquarters into a $10 mil-lion building with an impressive

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event hall, complete with a dance floor, in the penthouse.

The social events have evolved, as well, and now range from fashion shows to book readings to entertainment by performers like members of the Rockettes.

“It may take somebody coming in two or three times to events that we have before they ever actually open an account with us or do some type of trade through a mortgage or investment divi-sion,” Mr. Stuard said. “It’s just a matter of continually building that relationship.”

F&M has leveraged its mar-keting efforts by adding reward programs for favored customers and a daily lineup of innovative events to draw people into the bank. It now has $340 million of deposits and the largest share of the Clarksville metropolitan sta-tistical area market, 12.2%.

Building on the success of its “Goldcrest” program — which rewards high-value customers with better rates on certificates of deposit and other offers — F&M plans to roll out a program awarding products from cameras to Nascar tickets for using its debit cards.

F&M started Goldcrest in July 2004; to qualify, customers must have a checking account and at least $75,000 of deposits and/or loans with the bank. Roughly 12% of its customers have cleared that threshold and are awarded a 25-basis-point premium on CDs and periodic bonuses such as store gift cards.

“You’ve got to be able to offer them something a little special for their loyalty,” Mr. Stuard said. “There are a lot of cookie-cut-ter products out there, but our customers are not cookie-cutter. You have to be able to work with them and bend and kind of style

your products … around those individual folks.”

F&M began its growth plan in after moving its headquarters in the early 1990s to a seedy Clarksville neighborhood from 30 miles away in Dover. It went after potential customers through the semiweekly lunches, prepared by Judy Landiss — the marketing director’s wife — and served initially to six to eight women in a room the bank had to lease separately in its office building. The tables were decorated with flowers from the nearby Kroger supermarket.

“It was the ugliest building in Clarksville,” said Fred Landiss, a senior vice president and the director of marketing. “We selected some wallpaper. I went to a furniture store and bought a table with 10 dining chairs. We tell everybody, ‘Don’t come up with a lot of excuses about why you can’t do something, like, ‘I don’t have a pretty building,’ or ‘I don’t have a big budget.’ If you want to do it, you can do it.”

The lunches were such a hit that guests started bringing their friends. The bank had to lease more room in the building to accommodate the larger lunches, and soon Mr. Landiss was ask-ing his guests who else they would like to see at the lunches, building his guest list through referrals.

Mr. Stuard said word of mouth is critical for that particular group of customers. “When you have an event and it is so nice, they call their friends, and it’s a network. It’s unbelievable.”

According to Mr. Landiss, deposits jumped $8 million in the six months after the bank started holding the lunches. Now about 800 women attend the annual Christmas party.

During Stuard’s tenure, F&M’s events have expandedbeyond semiweekly lunches and now include everything from trips to Sicily and fashion shows to country music concerts and performances by members of the Rockettes.

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The lunches led to more elabo-rate events for larger groups. The bank noticed that deposits tend-ed to jump before a big event, since customers beefed up their accounts to get better tickets.

The bank has led trips to Sicily, held art openings and country music concerts, and hosted speeches by civic leaders. For its 100th anniversary last year, it hired the General Jackson show-boat from Opryland in Nashville for a riverboat dinner for 1,500 of the bank’s top customers.

F&M admits to spending more on marketing than a typi-cal community bank — between $700,000 and $800,000 a year. But Mr. Landiss said great events do not have to be expensive. For

instance, it cost less than $2,000 to fly six Rockettes in to perform at the 2005 Christmas party.

Mr. Stuard, a former real estate broker and auctioneer who joined the bank in 1989, said its market-ing department has earned the right to overspend its budget.

“No doubt, we have a very aggressive and forward-think-ing marketing group,” he said. “Honestly, we like to have a bud-get number, but we don’t back up from spending in regards to marketing and entertaining our clients.”

To help the bank grow, Mr. Stuard said, the staff needs the room to jump on an idea without worrying about layers of approval. “If for everything they do, they’ve got to ask somebody 10 counties

away or four states away, and they’re scared to make a deci-sion, it’s impossible.”

Consolidation has helped F&M attract top-notch talent from larg-er companies, including Regions

Financial Corp. and AmSouth Bancorp.

“We’ve been able to attract some real star talent in each market, especially with the merg-ers that are still going on today,”

Mr. Stuard said. “I’ve had prob-ably four or five different employ-ees out of the Regions [deal for AmSouth] that I’ve interviewed lately, and hired two of those in very strong markets.”

“There are alot of cookie-cutter products out there, but our customers are not cookie-cutter.”


COMMUNITY BANKER OF THE YEAR: THE BUILDER

CEO Wu Drives UCBH’sGrowth on Two Continents

Thomas S. Wu knows firsthand how hard it can be for an immi-grant to get a mortgage.

When he came to the United

States from Hong Kong in the early 1990s, he had a good job as the director of retail banking for the $1.3 billion-asset United Savings Bank in San Francisco

and a large down payment. Yet three banks rejected his loan application because he had not established credit here.

Mr. Wu said he finally got a

high-rate mortgage from a broker who charged a hefty fee.

“It triggered me to really think about other new immigrants,” said Mr. Wu, now the chairman, president, and chief executive of United and its parent, UCBH Holdings Inc. “If a banker would have difficulty getting a home loan — what about them?”

In 1992 Mr. Wu and his team developed a mortgage product for immigrants that featured dif-ferent ways of assessing their creditworthiness: checking their utility bill payments and passbook savings amounts and interview-ing their employers. Mr. Wu said United has had no chargeoffs on the hundreds of millions of home loans it has made since then, though it helps that the typical Chinese immigrant puts 30% down.

Mr. Wu transformed that small thrift into an $11 billion-asset banking company through acqui-sitions and a focus on interna-tional trade finance, and in 1998 he led the first management buy-out of any U.S. bank. United was the first U.S. community bank to open a branch in Hong Kong, and UCBH is set to become the first U.S. banking company to buy a Chinese bank outright.

For these accomplishments American Banker named Mr. Wu one of its 2007 Community Bankers of the Year.

“One of the things that always strikes me is the difference

between a good manager and a great manager,” said Brett Rabatin, an analyst at First Horizon National Corp.’s FTN Midwest Securities Research Corp. “A good manager tries to anticipate how to react to market trends, but a great manager dictates strategy by investing in the future, while still trying to drive EPS results in the near term. Tommy is such an entrepreneur and is so visionary, that it’s always interesting to see what direction he’s going to take the company.”

Mr. Wu, 49, was born and educated in Hong Kong. In the late 1970s he enrolled in a train-ing program for tellers at the Hong Kong offices of Standard Chartered Bank in Shanghai, and subsequently worked at a number of banks in Hong Kong, including holding midlevel management positions at First Pacific Bank.

In 1991, First Pacific asked Mr. Wu to emigrate to the United States to be a regional branch manager for its U.S. subsidiary, United Savings Bank. He took that job, overseeing two branch-es in Los Angeles, and within a year was promoted to direc-tor of retail banking in the San Francisco headquarters.

By January 1998, Mr. Wu had been promoted to CEO and was leading the thrift’s conversion to United Commercial Bank. But a month later, First Pacific’s majority shareholder, the Salim family in Indonesia, decided to sell United.

Wu turned a small San Francisco thrift, United Savings Bank, into a banking company with assets of $11 billion. “It’s always interesting to see what direction he’s going to take the company,” an analyst says.

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Bay View Bank in San Mateo, Calif., offered $105 million and then increased its bid to $120 million.

“Here I was CEO for less than two months and this was a crisis in my career,” Mr. Wu said. If the bank were sold to Bay View, “I would never have never had the chance to prove myself, and I would have never had the oppor-tunity to grow the franchise.” (Bay View was liquidated in 2003 by its parent, Bay View Capital Corp.)

So Mr. Wu flew to China, hoping to convince First Pacific’s board to sell United to a U.S. investor group led by United’s manage-ment. He and his team put up $3 million, and First Pacific’s board gave them 60 days to come up with the rest.

They did it in 45. In fact, the private placement

was oversubscribed at $170 mil-lion, so after the deal closed in April 1998, United was left with nearly $40 million of capital to build the bank.

United completed its conver-sion to a commercial bank that July and in November registered its stock with the Securities and Exchange Commission to trade subsequently on the Nasdaq. It hired more commercial officers and expanded its back-office operations to incorporate com-mercial lending.

Mr. Wu quips, “1998 was a pretty busy year for us.”

For several years UCBH posted record earnings every quarter as it capitalized on its profitable customer base.

“Chinese people are very entre-preneurial, and they tend to take out loans” to buy their commer-cial properties, he said. Chinese-Americans also hold higher-than-average savings balances.

With many customers in the

import-export business, UCBH expanded its international trade finance operations in Los Angeles. And to differentiate itself from competitors like Cathay General Bancorp in Los Angeles and East

West Bancorp Inc. in Pasadena, UCBH in 2003 became the first U.S. community bank to open a branch in Hong Kong.

“A lot of U.S. importers” of Asian goods “also have their own

factories in China because of the lower labor costs,” Mr. Wu said. “Having branches both in the U.S. and Hong Kong increased our capabilities in trade finance and helped build our brand

recognition.”That single branch has grown to

assets of $1 billion, including $600 million of loans, Mr. Wu said.

To expand beyond California, UCBH began buying banks and

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branches in cities with vibrant Chinese-American communities, and it now has operations in Seattle, Boston, Atlanta, Houston, and New York.

UCBH lost a 2006 bidding war with Cathay for the $326 mil-lion-asset Great Eastern Bank in New York, but this year it bought another New York bank, the $322 million-asset CAB Holding LLC and its subsidiary, Chinese American Bank.

The CAB Holding acquisition pushed the company’s assets past the $10 billion threshold that Chinese regulators require of foreign companies seeking a full banking license.

That paved the way for a deal in March for the $217 million-asset Business Development Bank

Ltd. in Shanghai. UCBH already has representative offices in Shanghai, Shenzhen, and Taipei, but the $205 million cash deal for the privately held Business Development Bank would give it its first full-service branches in mainland China.

The deal, which is expected to close by yearend, would make UCBH the first U.S. bank to buy a Chinese bank outright. A few large banking companies, such as Citigroup Inc., have bought minority interests in Chinese banks or formed joint partner-ships with them.

“China is still the factory of the world, as more than 70% of the imports into the U.S. comes from China … and the growth oppor-tunities are huge,” Mr. Wu said.

“Having a bank in China helps us to really facilitate the trade flows for our customers across the Pacific Rim” and gives UCBH “a competitive advantage.”

Few institutions in China focus on lending to small and midsize businesses, so UCBH has a great opportunity to build its balance sheet there, Mr. Rabatin said.

In another first, UCBH is selling a 9.95% stake to the $112 billion-asset Minsheng Banking Corp. Ltd. in Shanghai. Under a deal announced in October, Minsheng is to pay $317 million and would have the option to increase its ownership in UCBH to 20%.

Minsheng would be the first mainland Chinese banking com-pany to acquire a stake in a banking company based in the

United States. Mr. Wu said the cash generated would help UCBH complete its deal for Business Development Bank.

UCBH also expects the Minsheng connection will gener-ate trade finance business for both companies. “Minsheng’s strategic investment will also enable us to give more favor-able terms of remittance to our customers, which would help increase our market share in trade finance,” Mr. Wu said.

UCBH wants to increase its assets in China to $2 billion to $3 billion within five years, the CEO said. He expects it to hit the $20 billion mark in overall assets in 10 years and to open more branches in the U.S. markets it now serves.

While UCBH’s returns on assets

and equity have historically been well above its peers’, its per-formance ratios have dipped in recent years because of its acqui-sitions, said Joseph K. Morford 3rd, an analyst with Royal Bank of Canada’s RBC Capital Markets. Its ROA was 1.15% and its ROE 13.17% at Sept. 30, slightly below the average ratios for banks with assets of $10 billion or more, according to the Federal Deposit Insurance Corp.

Additionally, UCBH has had to deal with the same operating challenges facing the rest of the industry, including strains on its net interest margin, and more recently, its credit quality.

Still, the company’s credit quality in the third quarter was better than that of many other California banks suffering from the collapse of the housing con-struction market there. Mr. Wu said it has benefited from its geographic breadth, its diversi-fication into trade finance, and the fact that its commercial real estate customers — like its mort-gage customers — put a lot of equity behind their loans.

Total nonperforming assets on Sept. 30 were $36.9 million, or 0.33% of total assets, compared with $34.3 million, or 0.32% of assets, on June 30. Even in the tough operating environment, UCBH’s third-quarter net income rose 20.5%, to $30.8 million.

UCBH’s return on equity should be in the 15%-18% range within the next two to three years as its investments begin to pay off, Mr. Wu said.

Mr. Morford said this is “an interesting stage in the life cycle of UCBH. We’re here at the eve of the acquisition in China, which should give them a significant growth spurt, and take this fran-chise to the next stage.”

“China is still the factory of the world,” the Hong Kong-born Wu says. “Having a bank in China helps us to really facilitate the trade flows for our customers across the Pacific Rim” and gives UCBH “a competitive advantage.”

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THEIR GREATESTACHIEVEMENT IS THEEXAMPLE THEY SET.The 2007 Banker of the Year Honorees

Banker of the Year

James E. RohrChairman and CEO, PNC Financial Services Group, Inc.

Lifetime Achievement

L.William SeidmanEconomist and Chief Commentator, CNBCFormer FDIC Chairman, Former RTC Chair

Community Banker of the Year – The Advocate

Robert A. GlassmanCo-Chairman and Founder, Wainwright Bank & Trust Company

Community Banker of the Year – The Builder

Thomas S.WuChairman, UCBH Holdings Inc.

Community Banker of the Year – The Retail Performer

William S. StuardPresident and CEO, F&M Bank

Innovator of the Year

Elizabeth R. JamesVice Chairman, Synovus Financial Corp.

Sandler O’Neill + Partners, L.P.


Synovus Financial Corp. is the quintessential supercommunity bank, running 37 charters in five Southeast states. But don’t let its business model fool you. The $33 billion-asset company is blazing trails in everything from check imaging to mobile banking.

The primary force behind the advancements is vice chair-man Elizabeth R. James, win-ner of American Banker’s 2007 Innovator award. In 21 years at Synovus Mr. James, known as “Lee Lee,” recruited the people who developed the technology that fine-tuned customer service and ultimately the bank’s bottom line. Her energy and vision are widely credited with fostering an anything-is-possible culture that sets Synovus apart.

“My role is to find the right ways to break down the barri-ers and to lift people up and to engage them in a way that they know we want them to step out and take a risk,” said Ms. James, who also holds the title of chief people officer. “We want them to raise their hand. So we con-stantly ask each other, ‘Where is

banking going?’ ”In a separate interview, Richard

E. Anthony, the company’s chair-man and chief executive, praised Ms. James’ passion.

“She has made her mark … over the years, constantly show-ing a leadership approach in the field of technology,” he said. “Who knows where we would be if we didn’t have that level of commitment.”

Synovus first became known as a technology innovator with Total System Services Inc., now one of the nation’s largest credit card processors. But it has moved beyond that business to offer an ever-increasing suite of payments options within the bank, such as check imaging and mobile bank-ing, and it will soon pilot a pro-gram designed to make online purchasing safer and easier.

“We’re always looking for the next TSYS and the next great idea,” Ms. James said. “We have a lot of opportunities in front of us. Overall, we want to set an agenda that’s different than people’s expectations.”

Synovus plans to spin off its 80.8% stake in TSYS to the

BY PAUL DAVIS

At Synovus, Driving Growth Through People, Technology

“My role is to find the right way to break down barriers and to lift people up and to engage them in a way that they know we want them to step out and take a risk,” James says. “We want them to raise their hand.”

INNOVATOR OF THE YEAR

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banking company’s sharehold-ers on Dec. 31. The transaction will yield $485 million of capital. Executives have spent months, if not years, preparing for the transaction, and they acknowl-edge that owning TSYS has been a double-edged sword.

While Synovus was investing millions of dollars in the TSYS platform, many of its data pro-cessing employees migrated to the unit, creating what executives call “a period of mediocrity” at the bank that lasted from the mid-1980s to the mid-1990s, after

TSYS was moved out from under Synovus.

“The focus at that time was clearly not on the banking tech-nology,” Ms. James said. “There were legacy systems that had become older and complicated with a lot of hard code. It was becoming a struggle.”

Ms. James, who was the direc-tor of training at TSYS, had a key role in turning things around, moving to Synovus in 1995 as a senior vice president and its human resources chief. She assembled a team dedicated to

upgrading the company’s technol-ogy and to finding new ways to bank customers.

In re-creating the corporate cul-ture that existed when TSYS was in-house, it helped to encourage employees to speak out when they had new ideas, she said.

Each initiative is evaluated on how it will help Synovus expand and protect its position in the payments business, along with its degree of innovation and what impact it will have on customers. “We look at everything through those lenses,” Ms. James said. “There are many things that are going to change local banking in the future.”

One of those things is digital check imaging. Synovus was one of the first adopters, converting to that platform in early 2003. “From imaging, we have seen a real creativity emerge from within the banking operations area for new technology,” she said. “It has spilled into other areas.”

That includes mobile banking, which Synovus began offering earlier this year with the software developer Firethorn Holdings LLC. Few other banking companies have shown a willingness to con-sider mobile devices as a way of delivering banking services.

For Ms. James the decision was easy. “There’s no question that customers want things faster and at their fingertips,” she said. “It takes 30 minutes to find out that you lost your wallet and just six minutes when it’s your cell phone. All you have to do is watch teenagers operate a phone to get a sense that in some way that tool will be an integral way that we reach customers.”

Early next year Synovus will be the first banking company to collaborate with Nacha to test “secure vault payments,”

using the automated clearing house network to allow custom-ers to make purchases over the Internet. Synovus is enlisting local utilities, government agen-cies, and merchants to offer the payment option, which holds promise for reducing retailers’ costs and improving data security for customers.

The product also provides Synovus with opportunities to boost fee income by, among other things, offering cash management or corporate treasury services to merchants.

George Throckmorton, Nacha’s senior director, said Synovus’

involvement was instrumental in advancing the project. “We’ve tried to get this pilot under way for quite some time,” he said. “It has been a long road, but they were involved early on with brain-storming. We envision Synovus being our showcase for the pilot throughout next year.”

Synovus also collaborated with Metavante Corp. and S1 Corp. to create S-Link, a deposit-origina-tion and sales management soft-ware system that made it easier for bankers to open accounts, view customer data, and track sales and referrals. It also allows bankers to see how their busi-

“From imaging, we have seen a real creativity emerge from within the banking operations area for new technology,” James says. “It has spilled into other areas.”

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Outsourcing has its place, but Anthony says, “You don’t want to turn every-thing over to nonbank competitors…You run the risk of losing control.”

Ph

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ICBA and its

5,000 community bank members

congratulate all the nominees

and winners of the 2007

American BankerBanker of the YearAwards

One Mission. Community Banks.

THE FINANCIAL SERVICES ROUNDTABLE

CONGRATULATES THE

2007 HONOREES FOR THE

Impacting Policy. Impacting People.

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ness activity translates into their compensation. The platform cost more than $10 million to design.

S-Link shows that Synovus, while dedicated to in-house prod-uct development, is comfortable working with third-party vendors even if it means collaborating with possible competitors. Metavante, which was recently spun off from the Milwaukee banking company Marshall & Ilsley Corp., also man-ages Synovus’ deposit and loan core processing systems. Synovus is working with Metavante on improvements to its loan origi-nation system, improvements it expects to roll out next year.

“We believe in cooperation and collaboration, and that partner-ship has been one of the best,” Ms. James said. “We believe in working with people who are the best at what they do. It helps us arrive at the best answer.”

Synovus is an active participant in BITS, the technology arm of the Financial Services Roundtable, where company executives inter-act and share information with banks including M&I and U.S. Bancorp, which also has a sizable processing business. Topics of interest range from authentica-tion to fighting identity theft.

Outsourcing can be tricky, and Synovus avoids ceding owner-ship of products or services with long-term potential. “You always need an ability to develop on your own,” Mr. Anthony said. “You don’t want to turn everything over to nonbank competitors, because you run the risk of losing control of the payments business. When you lose the ability to control the business, you risk losing the income.”

Synovus’ status as a leading technology innovator is all the more remarkable considering it operates 37 separate banks in

largely rural markets across the Southeast. However, its push into more metropolitan markets such as Atlanta and Nashville corre-lated with its technology renais-sance of the mid-1990s.

Ms. James said Synovus’ decentralized structure height-ened a need for innovation, since the company cannot implement a standardized “cookie-cutter” plat-form. So five years ago it started using enterprise-scale software to integrate the management of its sales channels. Such soft-ware has allowed Synovus to consolidate several of its banks seamlessly, Ms. James said. “We are also an acquisitive bank, so we have to be able to introduce banks into our system quickly and easily,” she said.

Synovus’ operating model, though complicated, “is also very powerful, in that we get feedback about different ways to do things from a lot of sources,” Ms. James said. “That allows us to fuel this energy around finding a better way. We’ve got a business model that we believe in. … Technology is as the heart of that.”

Synovus created an emerg-ing business office in 2005 to examine growth opportunities. The company has a separate pay-ments council — led by Lisa White, the senior director of innovative solutions — that spe-cifically scouts ways to build that business, including ACH, debit and credit cards, and imaging technology.

Synovus also invests in tech-nology through Total Technology Ventures LLC, a venture capital firm it created in 2000. Many investments are in the payments area, such as ControlScan in Atlanta, which provides third-party verification services, and iKobo Inc., also in Atlanta, which

operates in the online interna-tional money transfer and pay-ment market.

The subsidiary has also invest-ed in start-ups that deal in finan-cial services technology, includ-ing Austin Logistics Inc., a Texas software company that predicts customer behavior, and Pay Rent, Build Credit Inc., an alternative credit bureau based in Annapolis, Md.

Total Technology introduced Synovus to Firethorn’s work with mobile-banking technology. (Gains from the fund’s investments con-

tributed $11 million to the compa-ny’s third-quarter earnings.)

Synovus has learned to pass on opportunities it deems too risky. Though she demurred on the details, Ms. James said the payments council and emerg-ing opportunities office have reviewed more than 200 ideas over the last year and a half, while choosing just a handful.

Interestingly, Synovus first con-sidered check imaging in the early 1990s, balking over the expense and immature technology. Now check imaging is considered the

leading candidate to become the next in-house project to move out of the bank, as TSYS was.

These investments allow Synovus to examine available options for innovation with mini-mal risk, Ms. James said.

“We like to find something that starts small and can be nurtured, protected, and grown over time,” she said. “Ideally, we hope to find a kernel and build from that. It has been a great opportunity to do something different, allow-ing us to grow and learn at the same time.”

During a rough 10-year stretch that ended around 1993, “the focus … was clearly not on the banking technol-ogy,” James says. “There were legacy systems that had become older and complicated.”

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LIFETIME ACHIEVEMENT

L. William Seidman managed to leverage candor, cunning, and wit into extraordinary success in business, education, the govern-ment, and finally the media.

The former Federal Deposit Insurance Corp. chairman took the agency from an also-ran to the peak of power, nimbly lead-ing through the savings and loan crisis, a test like none the country had seen since the Great Depression. His six-year tenure transformed how the government resolves ailing banks and sells their assets.

Today, at 86, Mr. Seidman is a staple on business television, offering investors straightforward assessments of everything from the credit crunch to oil prices as CNBC’s chief economic commentator.

In an interview, he said he does not expect today’s collapse in the housing market to repeat the late 1980s.

Things “will get much worse, but I don’t think it is going to imperil the financial system the way the S&Ls did,” Mr. Seidman said. For one thing, today’s prob-lem is more dispersed — millions of securities held by many dif-ferent types of investors, versus whole assets held by hundreds of thrifts.

There is a parallel, however. Back then it was tough to value the real estate that thrifts had financed, he said; today the assets are different, and more complex, but the issue remains market valuation. “We had to establish a market back then, and that’s

what’s going to have to happen today,” he said Nov. 1 on CNBC. “It’s going to take some time.”

How big the losses grow depends on how much further home values fall, he said, and loan repayment is key — as more mortgages perform, fewer secu-ritizations will default. However, he predicted the investors in

these securities, once burned, will be twice shy.

“People aren’t going to buy the way they have. It’s not good enough to say, ‘It’s Bear Stearns, so it must be OK,’ ” Mr. Seidman said.

He does not expect a government bailout to save the day. “It makes it much harder to fix because it’s

a private-sector mistake. It’s not a government mistake.”

But if a large bank teeters, Mr. Seidman said, regulators will rush in to rescue it.

“The government is going to have to decide whether ‘too big to fail’ is dead. My prediction is it isn’t,” he said. “There is not a regulator born who won’t use

the government to save a major institution.”

In the interview, Mr. Seidman, half in jest, took some of the blame for today’s mortgage problems.

“I have to admit that one of the principal villains is yours truly and the RTC, because we more or less invented tranched securitizations,

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Seidman’s Wisdom Still FlowingBY BARBARA A. REHM

“The country was blessed to have him as the FDIC chairman” during the savings and loan crisis, an agency veteran says. “Trust me, he was the right man at the moment. … He was completely above board.”


which have been used today to put all these mortgages into the financial markets,” he said. “The RTC was the first to really say, ‘You can securitize anything.’ ”

RTC, of course, stands for Resolution Trust Corp., an agency Congress created in 1989 to sell billions of dollars of assets seized from failed savings and loans. After four years atop the FDIC, Mr. Seidman took on a second job as the RTC’s chairman.

He actually puts the bulk of the blame for today’s problems on the credit rating agencies and regulators, specifically the Federal Reserve Board, which he battled frequently as the FDIC’s chairman.

“The regulators should have stopped it. The ratings agen-cies should have stopped it,”

Mr. Seidman said. “If the rating agencies had rated these things appropriately, this would not have happened. The financing would have dried up.”

All along the lending chain, he said, too few people had a stake in whether loans are repaid; originators chased fee income, brokers wanted big commissions, and securitizers just wanted to sell the debt.

Investors buying the securities “cared but had no way of know-ing if they would be repaid,” he said. “They had to rely on the credit rating agencies that were evaluating these securitizations.”

BUILDING A LEGACY

During his FDIC tenure, from 1985 to 1991, Mr. Seidman trans-formed the way troubled banks

were sold. His agency had been selling banks and their deposits while keeping the bad assets. With the number of failures bal-looning — farm banks, then banks in Texas, and finally New England savings banks — he began pay-ing buyers to take a whole bank, bad assets and all.

He also decided to sell assets from failed institutions as quickly as possible for whatever price the government could get. Though critics urged waiting until market values recovered, he said that the market was frozen, and that it was up to the government, through the RTC, to kick-start it. In addition to securitization, he tried auctions and bulk sales. Borrowing a tactic popularized by Filene’s Basement, the RTC lowered its prices the longer an asset went unsold.

Some buyers did get bonan-zas, but Mr. Seidman argues that those windfalls attracted new bidders, and that the added com-petition boosted prices.

Also, the government avoided the cost of carrying the assets and the risk that they would decline in value.

“Our profits started going up, and our costs started going down,” John Bovenzi, the FDIC’s chief operating officer, said in an interview. He was Mr. Seidman’s deputy in the late 1980s and remains an admirer.

“He held the agency to a high standard and defended it,” Mr. Bovenzi said. “He established and solidified the agency’s independence.”

During his six years in office more than 2,100 banks and thrifts failed with $650 billion of assets. The cost: $163 billion.

Surviving such a demanding job is a triumph in itself. He was under constant fire from Congress, the industry, and espe-cially his colleagues in the first Bush administration. In his 1993 book, “Full Faith and Credit,” he described a job at the RTC as having “all the best aspects of an undertaker, an IRS agent, and a garbage collector.”

No one, least of all Mr. Seidman, would claim his leader-ship was flawless, but fewer still would argue with his results. The FDIC emerged as a more indepen-

dent, more respected agency with an emboldened work force. And the RTC may be the only govern-ment agency ever to be created, accomplish its goals, and then go out of business.

Mr. Seidman emphasized research and training at the FDIC, and both remain its strong suits. The agency’s training center is named after him.

LIVING BROADLY

His story starts in Grand Rapids, home to both Gerald Ford and George Romney, rocks of the Republican Party. Mr. Seidman’s service in the Ford White House is common knowledge, as is his role as the oldest of three help-ing his father build a nationwide accounting firm now known as BDO Seidman LLP.

But his life is full of less well-known accomplishments.

After getting an undergraduate degree from Dartmouth College, he manned a destroyer in the Pacific during World War II. He earned a law degree from Harvard University and then an MBA from the University of Michigan. His ties to education run deep: he was the dean of Arizona State University’s business school; founded Grand Valley University in Grand Rapids, which today has 23,000 students; and started Washington Campus, a program that coaches business students on the ways of Washington. He

The secrets to Seidman’s success? They include getting the facts, conveying them candidly, and never taking himself too seriously. “I always tried to make it fun.”

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has written a memoir, helped for-eign governments fix their finan-cial systems, became a magazine publisher and a fixture on TV. Mr. Seidman has made mobiles with Alexander Calder and appeared in the Academy Award-winning movie “Ordinary People.”

He’s been married to his high-school steady, Sally, for 64 years; they have six children, 11 grandchildren, and one great grandchild.

Asked the secret to his suc-cess, Mr. Seidman replies simply: “Life is random. I was lucky.”

Rick Hohlt, a veteran Republican lobbyist, worked at the U.S. League of Savings Institutions in the 1980s, and perhaps no one sat in more meetings with regu-lators as a representative of the thrift industry. The two men are close friends today; back then Mr. Hohlt said Mr. Seidman’s breadth of experience gave him an intimi-dating power.

“Whoever Seidman talked to, he could say, ‘I’m one of you,’ because he was,” Mr. Hohlt said. “He’d been a rancher, an academic, a blue blood, a lawyer, an accountant, a businessman, in the White House. That’s unusual. There was a sense that you can’t roll this guy, you can’t beat him. He could go toe-to-toe with anyone.”

After weighing that thought, Mr. Hohlt added, “And he did it all without being a jerk.”

Gerald J. Levy, the chairman of the $2 billion-asset Guaranty Bank in Milwaukee, was a thrift executive during Mr. Seidman’s term, and the two served on Fiserv Inc.’s board together.

“He’s just an amazing guy,” Mr. Levy said. “I’ve known him over 20 years, and I’ve seen no diminishment of his energy. Every time I see him, he’s throwing out new ideas and getting involved in

new projects.”Indeed, Mr. Seidman is an

uncommon blend of smarts, humil-ity, and fun.

His lack of pretense is remarkable. A wealthy man for

decades — he has two homes on Nantucket as well as residences in Hawaii and Florida and an 11,000-acre ranch outside Taos, N.M. — he uses plastic grocery bags as luggage, and sightings of

him in a suit are few.Of the grocery bags, Mr.

Seidman says, “They are flexible and disposable.” (He had flown in from Boston for the interview with his belongings stuffed in a

plastic bag.) “It’s the lightest bag you can have.”

Alice Goodman, the FDIC’s head of legislative affairs, recalls picking Mr. Seidman up from the airport and driving with him to


Capitol Hill for a hearing in the late 1980s. When they arrived, Ms. Goodman asked him if she could hold his “luggage” while he testified. “He said, ‘No. I’m going to sit on it,’ ” she recalled in an interview.

Mr. Seidman, who rode his bike to work, routinely wore an L.L. Bean blue blazer and gray slacks. For the FDIC’s 1987 annual report, the public relations people air-brushed his slacks blue to make it appear he was wearing a suit.

“He was absolutely livid,” Ms. Goodman recalled.

When Congress was drafting the S&L bailout bill in 1989, Mr.

Seidman held meetings with the legislative staff twice a day to plot strategy. The meetings were at once collaborative and effi-cient, Ms. Goodman said. “He didn’t require memos. You could just lay things out, and he would make a decision. He had great instincts.”

That law, the Financial Institutions Reform, Recovery, and Enforcement Act, loaded the FDIC with powers, including a veto over new charters and the authority to seize ailing banks. “Congress and the industry trust-ed him,” she said.

People who worked for Mr.

Seidman said he had a way of making work fun. Yes, fun — even though their long hours yielded little glory and lots of grief.

David Cooke spent years on the front lines with Mr. Seidman as the RTC’s executive director. “This is going to sound corny, but it was a lot of fun and a privilege to work with him,” Mr. Cooke said in an interview. “At the FDIC, he is legendary. He got the best out of people.”

If anyone knew how bad things in the banking system were, or could have been, it was Paul Fritts, the gruff Midwesterner whom Mr. Seidman picked to be the FDIC’s lead supervisor.

“The country was blessed to have him as the FDIC chairman. Trust me, he was the right man at the moment,” said Mr. Fritts, now living in southern Illinois. “Never, not one single time, did he try to interfere” in a bank’s supervision. “He was completely above board. I’m telling you, that’s unusual for Washington.”

FDIC veterans cite Mr. Seidman’s cutting sense of humor and his gift for pithy one-liners. He loved telling people why he named his Irish wolfhound puppy

“Proxmire.”The Senate Banking Committee

chairman at the time of his confirmation as FDIC chairman was Sen. William Proxmire, a Wisconsin Democrat and the only senator who voted against his nomination. The name allowed Mr. Seidman to instruct the dog thusly: “Heel, Proxmire.” “Sit, Proxmire.” “Stay, Proxmire.”

Ken Guenther met Mr. Seidman in the Ford administration and worked closely with him during the 1980s, when Mr. Guenther ran the Independent Bankers Association of America.

“He told it as it was in col-orful, easy-to-understand terms — political consequences be damned,” Mr. Guenther recalled in an interview. “He’s not prickly. He’s not petty. He doesn’t let the little stuff bother him. He has a sense of humor, even about himself. In fact, he is the worst-dressed man in America by design.”

Diane Casey-Landry, the presi-dent of America’s Community Bankers, still remembers how gracious Mr. Seidman was the first time they met. She had just moved to Washington to take a job at the IBAA, and her boss, Mr.

Guenther, introduced them.“Bill talked to me like he was

talking to the head of Citibank,” Ms. Casey-Landry recalls.

In her next job, she was argu-ably Mr. Seidman’s boss as a vice president at the RTC Oversight Board, an agency led by five high-powered officials, includ-ing Treasury Secretary Nicholas Brady and Fed Chairman Alan Greenspan. It was supposed to keep tabs on the RTC, but the relationship between the two agencies was tense from the start. It was a cumbersome setup, and rather than working the bureaucracy, Mr. Seidman frequently took his complaints directly to reporters.

“He recognized the power of the press and how to use it to his advantage, or really his agency’s advantage,” she said. “It was never about him. It was about getting the job done.”

His media smarts may have been overshadowed only by his lobbying skills. Mr. Seidman’s honest assessments endeared him to both Republicans and Democrats.

“We had an excellent rela-tionship. It was frank, honest,

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straightforward, and practi-cal,” said Donald W. Riegle, the Michigan Democrat who chaired the Senate Banking Committee from 1989 to 1995. “Bill was just a great public man.”

Mr. Riegle, who is now the chairman of government relations at Apco Worldwide, also noted Mr. Seidman’s resilience, recall-ing a 1990 accident at his ranch in New Mexico. Mr. Seidman was thrown by his horse, separated his pelvis, and suffered massive internal bleeding on an hourlong

drive to the hospital. “It probably would have killed

a less tough man,” Mr. Riegle said. “But Bill is tougher than boiled owl.”

(That is not why Mr. Seidman walks with a side-to-side roll. That’s a separate horse story. About 10 years before that acci-dent, he was knocked off a polo pony. That mishap led to an arti-ficial hip.)

WORDS OF WISDOM

The secrets of Mr. Seidman’s

success, in his own (mostly para-phrased) words:

• Get the facts. A sound deci-sion can’t be made without them.

• Be proactive and honest.• The press and the Congress

are important. Ignore either at your peril.

• Hire good people, let them do their jobs, and reward their successes.

• Listen.• Don’t take yourself too

seriously. “You cannot succeed without people who are enthusi-

astic and who are enjoying them-selves,” he said. “I always tried to make it fun.”

• Finally, “never look back.”That last one is why Mr. Seidman

did not like the family account-ing business. His father, Frank, founded Seidman & Seidman, and much of the younger Seidman’s 25-year tenure there was spent helping clients, including J. Paul Getty, with tax planning.

“I moved into tax because it was forward-looking,” Mr. Seidman said. “I didn’t like audit-ing. All you did is look back. I couldn’t do that.”

So what’s he looking forward to now? He’s still enjoying his gig as CNBC’s chief economic com-mentator. (“Seidman Speaks” airs Thursday mornings.) He is rais-

ing money to invest in commu-nity banks. (“There is still a great niche for community banks, and there will be as long as deposit insurance exists.”) And he writes a column for Bank Director maga-zine. (His latest work is on the futility of trying to overhaul the bank regulatory structure.)

He also serves as a director for plenty of companies, including Promontory Financial Group LLC, the consultancy started by for-mer Comptroller of the Currency Eugene Ludwig.

“He was an icon of his age,” Mr. Ludwig said of Mr. Seidman. “I think he will be without equal as FDIC chairman. He did what he believed was right, and he did it with vigor. I think regulators today can learn from that.”

His lesser-known accomplishments include starting a college, helping foreign governments fix their financial systems, and making mobiles with Calder.

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BY AMERICAN BANKER STAFF

YEAR IN REVIEW

Take One Credit Crunch. Add Deals, Bills, and Exec Shuffles. Shake Well.

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The mortgage collapse of the past year lay at the heart of the worst credit crisis in a decade.

It wiped out many independent originators, and even Countrywide Financial Corp., the largest and perhaps most respected mortgage company in the nation, was shak-en. Wholesale and correspondent channels were crunched, and large banking companies moved in to fill the gap — including a notable push by Bank of America Corp., which has a relatively insignificant mortgage operation for its size.

Investment banks mainly stood on the sidelines, with idle bond machines, waiting for a recov-ery. But with home values falling and a wave of adjustable-rate mortgages due to reset over the next couple of years, it is unclear

when that recovery will arrive.The bad news started in

January when New Century Financial Corp., the nation’s larg-est subprime lender at the time, said it was slimming its retail net-work by 10%, or 225 branches, and that its full-year production would be flat from last year’s total, at $60 billion. So far, so-so, but much worse was in store for the company and the industry.

The next month New Century said it would have to restate its profits for the first nine months of last year. It had not been reserving adequately for forced repurchases of bad loans. The U.S. Attorney’s Office for the Central District of California launched a criminal investigation into the trading of New Century’s securities and its accounting (which the Securities and Exchange Commission also probed). Warehouse lenders

pulled their lines, and in April, New Century filed for bankruptcy protection.

Numerous other lenders would enter bankruptcy over the course of the year, including American Home Mortgage Holdings Inc., People’s Choice Home Loan Inc., Quality Home Loans Inc., and First Magnus Financial Corp. Many others ceased lending — some temporarily, others indefinitely. Tens of thousands of jobs were cut. A host of subprime and alter-native-A products and features, which had been all the rage in years, became scarce.

It was clear as early as February that this crisis would not be confined to nonbanks or mono-lines. That’s when HSBC Holdings PLC announced an increase in its bad-debt charge for 2006; it attributed the increase to prob-lems in its U.S. subprime lending business. The London company replaced the head of that busi-ness, stopped buying loans from correspondents, and eventually stopped funding brokered loans.

At several points in the year some came to the premature con-clusion that the worst was behind the mortgage industry.

For example, in June, when the unraveling of two Bear Stearns Cos.-controlled hedge funds was dominating the headlines, Doug Duncan, the chief econo-mist for the Mortgage Bankers Association, said the monoline lenders that had survived the

shakeout had “demonstrated that they’re in the sustainable part of the subprime market.”

The following month the Bear funds collapsed.

And in August things got really bad. The liquidity crisis threat-ened to engulf companies once thought either to be too big and sophisticated to be vulnerable, like Countrywide, or to oper-ate in niches free of credit risk, like the jumbo lender Thornburg Mortgage Inc.

As the market for commercial paper froze up, analysts specu-lated that Countrywide could file for bankruptcy, and newspa-pers reported runs on its thrift. However, Countrywide soon more than made up for any panicked withdrawals by offering generous rates on certificates of deposit.

Still, Countrywide drew down

its entire $11.5 billion of unse-cured backup credit lines and expedited a plan to shift its mort-gage operations to the thrift. The company stopped making loans it could not sell to Fannie Mae or Freddie Mac or keep in the thrift’s portfolio.

In September, Countrywide got a vote of confidence and a shot in the arm from B of A to the tune of $2 billion in preferred stock. Like the retail deposits, B of A’s invest-ment came at a price: a 7.25% yield; the option to convert the shares to common stock (giving B of A a 15% stake of Countrywide at an 18% discount to the market price at the time); and right of first refusal to meet any buyout offers for Countrywide.

Thornburg, which lends to well-to-do borrowers and has delinquency rates well below


industry averages, faced margin calls. It had to cease lending for much of August and unload $20.5 billion of mortgage-backed securities, or roughly 35% of its assets, at discounts. But it also appears to have pulled through. By September it was lending again and raising money in the capital markets (though it still anticipated it would need waivers on profitability covenants from its warehouse lenders).

Private-equity firms and other would-be bottom-feeders were quick to step into the market this year, but many deals ended up collapsing, being renegotiated, or getting stuck in limbo.

H&R Block Inc. agreed in April to sell its subprime unit, Option One Mortgage Corp., to Cerberus Capital Management LP, and for months, even though market conditions were worsening, the tax preparer insisted to its ana-lysts and shareholders that the deal would close as scheduled in October. But by September, H&R Block had to admit that the deal was in doubt, and that it was trying to get Cerberus to renegotiate.

Similarly, Lone Star Funds’

deal to acquire Accredited Home Lenders Inc. was clouded for weeks by fighting between the parties over whether the buyer was obligated to close the deal, given Accredited’s weakened out-look. The deal closed in October. Accredited got $100 million of working capital, and it resumed lending after a hiatus of nearly two months.

Troubles at the subprime joint venture C-Bass LLC helped derail a merger deal between its two owners, the mortgage insur-ers MGIC Investment Corp. and Radian Group Inc. The drying up of debt financing for buyouts threat-ened to scotch the planned sale of PHH Corp. to General Electric Co., which would have kept PHH’s fleet-management business and sold its core mortgage business to Blackstone Group.

NovaStar Financial Inc. got $49 million of financing from the private-equity arms of Massachusetts Mutual Life Insurance Co. and Jefferies Group Inc. but later had to cancel a $101 million preferred-stock offering. Without that money, NovaStar had to further slash its lending, even in the retail channel, which

it had expected to become its pri-mary source of originations.

GE sought a buyer for WMC Mortgage Co. but gave up two months later and shut the unit down. The investor Gerald J. Ford got cold feet about his deal to invest $80 million in Fremont General Corp., even after it had shed its commercial realty and subprime residential lending businesses. In early November, Fremont said that it had termi-nated the deal, but that it was in discussions with potential new management teams. Shortly after-ward, it hired a new management team led by Stephen H. Gordon, the former chief executive of Commercial Capital Bancorp Inc., which he sold to Washington Mutual Inc. last year.

When it comes to mortgages, B of A appeared to be one of the few gainers in a year that will be remembered for its casualties.

The Charlotte company intro-duced a no-fee mortgage that does not charge for application, appraisal, loan origination, title, flood determination, and other customary services. Though the product was dismissed by some observers as a gimmick, Liam McGee, B of A’s president of glob-al consumer and small-business banking, said in September that the offering had helped boost his company’s mortgage applica-tion volume and, importantly, the share of depositors who had also taken out a purchase mortgage with the company.

By then B of A was also flog-ging reduced prices on several fixed-rate offerings in a bid to win refinancing business among prime borrowers facing resets on their adjustable-rate loans.

Fannie and Freddie also made something of a comeback, after several years of being marginal-

ized by their accounting and gover-nance problems and by the boom in nontraditional lending. Even the Federal Housing Administration mortgage guarantee program, long considered a backwater, gar-nered newfound respect in indus-try and policy circles; President Bush made it the centerpiece of his mortgage relief plan.

One lender predicted that the mortgage industry would once again be dominated by the “three F’s: Fannie, Freddie, and FHA.”

Industrywide delinquency and foreclosure rates climbed all year, and despite much talk about lend-ers working with borrowers to help them stay in their homes, by the fall it was beginning to look like relatively few modifications and workouts were being done.

A study Moody’s Investors Service Inc. released in September found that the 16 largest sub-prime servicers, which manage $950 billion of loans, modified just 1% of the adjustable-rate ones that were made in 2005 and reset in January, April, and July.

Many consumer advocates depicted the industry as unwilling to cut borrowers any slack, but in some cases the issue appeared to one of competence, or at least capacity, rather than compassion. Moody’s discovered that many servicers were relying on letter-writing campaigns, rather than outbound calls, to contact bor-rowers. One vendor reported that at least two of the top five ser-vicers were telling borrowers it would take two to three months to determine whether a loan qualified for a workout — delays that could push more borrowers into foreclosure.

NATIONAL

By late summer it was clear the pain of excessive mortgage lend-

ing would reach far and wide. As the secondary market dried up, some companies were forced to take drastic measures. In August, Capital One Financial Corp. closed its wholesale mortgage business. A month later National City Corp. and First Horizon National Corp. announced plans to reduce their mortgage operations.

Profit warnings proliferated in September. Citigroup Inc., Washington Mutual Inc., and Sovereign Bancorp Inc. all warned of earnings hits in the same week. Downey Financial Corp. and Zions Bancorp. followed a week later.

Credit quality was largely to blame. Both Citi and Wamu pumped up their provisions, though Citi also cited hits from leveraged loan writedowns and losses on subprime mortgage-backed securities. Zions, mean-while, issued two warnings about higher loan-loss reserves in less than a month.

The third-quarter news at B of A was not much better. “Mistakes we made in judgment” accounted for nearly two-thirds of its rough-ly $1.5 billion of trading account losses, Kenneth D. Lewis, its CEO, told investors. Within days Mr. Lewis fired the head of its global

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structured products unit and then announced the departure of the investment bank’s CEO. B of A is shedding 3,000 people, many of them from the investment bank.

JPMorgan Chase & Co. record-ed $1.63 billion of writedowns and charges in its investment bank for the third quarter, but the company managed to post higher earnings than many other bank-ing companies on strong revenue from other business lines.

James Dimon, its CEO, said JPMorgan Chase would buck an industrywide trend and expand rather than curb its mortgage originations, even subprime ones. He also vowed to hire more mort-gage lenders.

Wachovia Corp., the nation’s fourth-largest banking company, reported earnings dented by roughly $1.3 billion of market-related losses, but its CEO, G. Kennedy Thompson, was more sanguine than his counterparts in the industry and vowed to apply the lessons his company had learned during the quarter.

One of those lessons, accord-ing to Thomas Wurtz, Wachovia’s chief financial officer, was that the use of a structured invest-ment vehicle approach to house

assets off the balance sheet had backfired, forcing Wachovia to take a $50 million mark-to-market writedown to move the assets back on to the sheet.

Meanwhile, the Treasury

Department worked with Citi, B of A, and JPMorgan Chase, the nation’s three biggest banking companies, to back what became known as the “super SIV” to purchase assets held by such

vehicles.After Merrill Lynch & Co. Inc.

reported a net loss of $2.24 bil-lion for the third quarter and underestimated mortgage-relat-ed writedowns for the period,

despite an earlier profit warn-ing, E. Stanley O’Neal, its chair-man and CEO, reportedly called Wachovia’s Mr. Thompson to suggest their companies discuss a merger. Mr. O’Neal reportedly

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made the call without the board’s approval — a move that led to his resignation Oct. 29.

Mr. O’Neal was not the only CEO to fall on his sword.

Charles O. Prince spent much

of the year reshuffling Citi’s senior management and fending off demands that he step down. He finally succumbed to pres-sure to do so on Nov. 4 after it emerged that the billions of dollars of market-related write-downs and losses his company took in the third quarter were only the tip of the iceberg.

Citi revealed it would write off $8 billion to $11 billion to reflect the plummeting value of securi-ties tied to subprime mortgages. It appointed former Treasury Secretary Robert Rubin as the chairman of the board and Sir Win Bischoff, the chairman of Citi Europe, as the acting chief executive.

The executive lineups at sever-al other large banking companies also changed this year; Wells Fargo & Co., Nat City, and U.S. Bancorp got new chief execu-tives. Another notable executive to exit this year was Vernon W. Hill 2nd, who left Commerce Bancorp Inc. of Cherry Hill, N.J.,

under regulatory pressure in late July. Roughly two months later Commerce made a deal to sell itself to Toronto-Dominion Bank’s U.S. banking arm, TD Banknorth Inc., for $8.5 billion.

Speculation about other deals finally bore fruit as two regional banking companies, Marshall & Ilsley Corp. and Synovus Financial Corp., announced plans to spin off their processors. M&I said that it would use the proceeds for stock buybacks, while Synovus said it would buy back shares and possibly scout acquisitions.

However, Synovus said it would not look for acquisitions in Florida, where the purchase of First Florida Bank contributed to deterioration in its commercial real estate portfolio in the third quarter, as the weaker mortgage market hurt the Naples unit’s loans to home builders.

KeyCorp and Regions Financial Corp. also blamed weaker com-mercial real estate for third-quar-ter earnings that fell short of expectations.

However, a handful of com-panies appeared to weather the credit storm well.

Both Wells Fargo and U.S. Bancorp cited a few dings in the

third quarter but still managed to report solid results.

James E. Rohr, PNC Financial Services Group Inc.’s CEO, crystallized its approach for Wall Street after reporting third-quarter results that beat analyst estimates.

“We gave up earnings — peo-ple were enjoying large spreads on interest rate bets. They were enjoying large spreads on sub-prime and big fees on LBO-debt underwriting,” he said. “They were all great businesses until they weren’t.”

COMMUNITY BANKING

Community bankers haven’t had much to cheer about this year.

Most were not affected by the meltdown in the subprime mort-gage markets — though there were some notable exceptions — but many still suffered from an overall slowdown in demand for housing as what had been red-hot markets cooled considerably.

Meanwhile, competition for commercial deposits and loans has been as intense as ever in recent quarters, and with the yield curve remaining a challenge, net interest margins are at or near

their lowest levels in years.For many banks, the key to

surviving the current operating environment is to team up with other banks. Though this year will not go down as the busiest for mergers and acquisitions — thank the jittery capital markets for that — it seems that more of the banks that are finding a part-ner are doing so out of necessity. Specifically, they say they need to gain scale to compete against large rivals and to spread surging compliance costs over a larger asset base.

Even mutual thrifts that histori-cally have relished their indepen-dence are finding that they cannot go it alone any longer. Mutual-to-mutual mergers are rare, because they can be a challenge to exe-cute, but executives at a number of thrifts made them happen this year. One chief executive put it this way: “You either grow or you die. It’s that simple.”

Perhaps the poster commu-nity bank for 2007 is Bradford Bancorp Inc. in Baltimore. The once-sleepy mutual thrift bought three Baltimore-area thrifts, near-ly doubling its assets, to $521 million, and it plans to continue buying banks with the proceeds

from a public offering expected to close in the first quarter.

Dallas R. Arthur, Bradford’s CEO told American Banker in an interview this year that if his company wants to remain com-petitive, it needs to get bigger and diversify. As a mutual, he said, its options for raising capi-tal are limited. “Over a period of time the mutual business model is not going to work.”

Overall, though, the pace of acquisitions slowed this year, especially in the second half. One reason was that demand for trust-preferred securities, which many community banks had relied on to raise cash to fund deals, virtually dried up as spreads wid-ened in reaction to a widespread credit crunch.

Some deals that were announced either fell through or appeared to be in jeopardy. In at least two instances, the seller walked away after the buyer’s stock price plummeted.

One proposed deal to keep an eye on is the one between FNB Corp. in Christiansburg, Va., and Virginia Financial Group Inc. When that deal, billed as a merg-er of equals, was announced in July, the companies said they would form the largest banking company based in Virginia, with more than $3 billion of assets. But by mid-September some FNB shareholders had grown disillu-sioned and said they would urge other investors to vote against the deal. Their argument: The deal is actually a sale of FNB at a premium of just 4% over the closing price the day before the announcement.

Though it has been a challeng-ing year for bankers nationwide, nowhere have they struggled more than in Michigan.

The state has lost more than

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300,000 jobs in the last five years and is showing no signs of emerg-ing from a prolonged economic slump. As a result, many bank-ing companies either based or doing business there — includ-ing Huntington Bancshares Inc., Mercantile Bank Corp., Capitol Bancorp Ltd., and Independent Bank Corp. — are reporting sig-nificant loan losses, particularly in their commercial real estate portfolios.

With loan demand obviously weak there, several Michigan banking companies are look-ing elsewhere for growth. For example, Flagstar Bancorp Inc. of Troy — the largest one based there now that Comerica Inc. has moved its headquarters to Dallas — scaled back its branch expan-sion plan in its home state and turned its attention to the Atlanta suburbs.

However, it may take some time for that plan to pay off. If a third-quarter profit warning from Security Bank Corp. of Macon, Ga., is any indication, the Atlanta area has become overbuilt and is awash in unsold homes. The $2.7 billion-asset Security — which revealed in August that its plum-meting stock price had scuttled its planned acquisition of First Commerce Community Bank in Douglasville — said in early October that it would set aside $20 million for the third and fourth quarters for loan losses, and that it had created a new senior level management position: problem asset manager.

Bankers in another once-siz-zling market, the Inland Empire region of Southern California, also are struggling with dicey loans to residential developers.

PFF Bancorp Inc. in Rancho Cucamonga had a full quarter’s earnings nearly wiped out by an

$8 million charge on three loans to a single residential developer. PFF’s chief executive blamed excess inventory of new homes in the region and warned in July that loans to other developers were showing signs of weakening.

Still, some community banking companies could not blame their earnings woes on market condi-tions or a softening economy.

In late April, Sterling Financial Corp. of Lancaster, Pa., announced that it was investigating a poten-tial fraud scheme at its equip-ment-leasing subsidiary, which had been the $3.3 billion-asset company’s biggest moneymaker for the past few years. A few weeks later it said that it would take a writeoff of $145 million to $165 million, and in mid-July it announced it was selling itself to PNC Financial for $19 a share, or 15% below the stock’s price before the fraud was discovered.

Other than three banks that failed late in the year, per-haps no banking company had a more tumultuous 2007 than Coast Financial Holdings Inc. of Bradenton, Fla.

The problems started in January, when Coast disclosed that hundreds of borrowers would not be able to repay loans on homes still under construc-tion because the St. Petersburg builder went bankrupt. As losses mounted and Coast’s stock price plunged to the low single digits, shareholders and borrowers filed waves of lawsuits claiming the company knew the builder was in trouble but failed to alert them.

In August, First Banks Inc. of St. Louis said it would buy Coast for $3.40 a share, or 79% below where the stock started the year.

WASHINGTON

Banking industry representa-

tives knew the Democratic victory in the 2006 midterm elections would mean increased interest in consumer issues, including predatory lending, card practices, and student lending. But a ris-ing tide of mortgage foreclosures and a crippling credit crunch put banking issues under a spotlight hotter than any since the savings and loan crisis.

Nearly every Democratic presi-dential candidate rolled out a plan for protecting borrowers, reining in mortgage brokers, or beefing up lender underwriting. The crisis revived interest in reform of the government-sponsored enterpris-es, spurred lawmakers to mod-ernize the FHA, and gave momen-tum to legislation that would let borrowers protect their homes in bankruptcy proceedings.

Regulators, too, were pressed to do more to fix problems in

the subprime mortgage market, particularly the Federal Reserve Board, which Senate Banking Committee Chairman Chris Dodd blamed for not writing rules under the Home Ownership and Equity Protection Act to rein in abusive lending. (The Fed prom-ised is expected to propose rules in December.)

The central bank became a regular punching bag on Capitol Hill. House Financial Services Committee Chairman Barney Frank took the Fed to task for not doing enough to stop dodgy card practices, and other lawmakers repeatedly said it was not as focused on consumer protection as it should be.

After the credit crunch began in August, lawmakers, includ-ing Sen. Dodd and Sen. Charles Schumer, began beating the drums for a temporary hike in the

caps on the mortgage portfolios held by Fannie and Freddie. The lawmakers and several industry representatives argued that lift-ing the caps would let the GSEs purchase more subprime loans and provide more liquidity to the secondary market. Some lawmak-ers also backed an increase in the conforming loan limit after reports surfaced that the second-ary market for jumbo loans had evaporated.

The Bush administration had problems with both proposals. President Bush said Aug. 9 that the portfolio caps should not be lifted until Congress passes comprehensive reform for GSE regulation.

The Office of Federal Housing Enterprise Oversight gave in and offered some flexibility Sept. 19, agreeing to let Fannie increase its portfolio 2% a year (Freddie


already was allowed to do so) and raising the cap for both slightly, to $735 billion. But Sen. Dodd called OFHEO’s actions tepid, and at a press conference Oct. 3, Democratic leaders continued to press the agency to do more.

While lawmakers were press-ing OFHEO to act, comprehensive GSE reform legislation remained stalled in the Senate.

After striking a deal with the Treasury Department in December of last year, Rep. Frank ushered a bill through the House in May that would create a new regulator for Fannie, Freddie, and the Federal Home Loan banks. Though the bill contained some provisions the Bush administration opposed, including a higher conforming loan limit for high-cost areas and restrictions on when the regulator could limit mortgage portfolios, Treasury Secretary Henry Paulson praised the measure and pres-sured the Senate to follow suit.

Sen. Dodd has said the issue is a priority, but the Senate Banking Committee has yet to introduce a GSE bill. Observers say enactment this year remains unlikely but is theoretically possible if Sen. Dodd and Sen. Richard Shelby,

the panel’s lead Republican, craft a compromise.

The same was true for another industry priority: a bill to restrict ownership of industrial loan com-panies. On Jan. 31 the Federal Deposit Insurance Corp. surprised some observers by extending its moratorium on any ILC applica-tions by commercial companies by one year. The prospect of wait-ing that long proved too much for Wal-Mart Stores Inc., which had helped reignite the debate by applying for a Utah ILC charter in 2005. The retailer withdrew its application March 16, say-ing that the controversy was too big and that its reason for get-ting the charter — to process cards in-house — largely van-ished when bank partners began slashing prices.

However, the controversy con-tinued without Wal-Mart’s appli-cation. The House passed a bill by a vote of 371 to 16 on May 21 that would ban ILC owner-ship by companies that derive at least 15% of their revenue from commercial activities. Though the Senate Banking Committee held a hearing on the issue Oct. 4, Sen. Dodd has yet to explain his

position. Sen. Robert Bennett, the lead

defender of ILCs, has said he will oppose any legislation that would ban commercial owner-ship. Instead, he has said he could accept a bill that limits the char-ter. Sources have said he is work-ing on his own bill and may sup-port legislation that would stop commercially owned ILCs from branching across state lines.

But lawmakers are running out of time. The FDIC’s morato-rium is set to expire Jan. 31, and FDIC officials, including Chairman Sheila Bair, have indicated anoth-er extension is unlikely unless Congress seems poised to act immediately.

Lawmakers did pass a bill to cut student lenders’ subsidies by roughly $20 billion.

The College Cost Reduction and Access Act passed the House 292 to 97 and the Senate 79 to 12 on Sept. 7 and was signed into law Sept. 27. The legisla-tion — which used the subsidy cuts to offset the cost of shrink-ing subsidized loan interest rates and beefing up grant funding — was assisted in part by New York Attorney General Andrew

Cuomo’s investigation of close ties between student lenders and school officials.

The new law threw a curveball at the deal struck in April for SLM Corp., the student lender better known as Sallie Mae, by a group that includes B of A, JPMorgan Chase, and the private-equity firm J.C. Flowers & Co. After the sub-sidy cut, the buyers tried to rene-gotiate, Sallie balked, and now a court is weighing what should happen next.

A drive to reform the FHA also was expected to succeed. President Bush made FHA reform one of the key pieces of his plan to stem foreclosures in the sub-prime mortgage market. On Aug. 31 he called for some immedi-ate changes, including allowing struggling borrowers to refinance into less-costly FHA loans, and he urged Congress to pass broader reforms that would modernize the agency’s insurance program by lowering down-payment require-ments, increasing loan limits, and creating pricing flexibility.

The House passed a bill by a vote of 348 to 72 on Sept. 18, and the Senate was expected to approve a bill by yearend. Both bills would boost FHA insurance limits and allow the agency accept loans with down payments below the current 3% minimum.

Lawmakers are expected to resolve differences between the bills soon and then send it to President Bush for his signature.

Relatively few bills were enacted this year, but legislation contrary to the industry’s interests seemed to multiply each week.

The year began with a spotlight on credit cards. Sen. Dodd chose the topic for his first banking-related hearing as the Banking Committee’s chairman Jan. 25, during which he focused on two

practices: universal default and double-cycle billing. Criticism of the practices from him and other lawmakers spurred JPMorgan Chase to announce in January that it would stop double-cycle billing, in which interest is charged on the sum of the average daily balances for the two previous billing periods. Citi announced in March that it would stop using universal default, in which the interest rate on a card account is raised if the customer does not make timely payments on an unrelated account.

But such voluntary changes did little to soften congressional criti-cism. Sen. Carl Levin introduced a bill May 15 that would prohibit lenders from charging interest when card debts are paid on time or in full. It also would bar rate hikes on outstanding debt and cap penalty rate hikes at 7 percentage points.

Other lawmakers, includ-ing Sen. Dodd and Rep. Carolyn Maloney, the chairwoman of the House Financial Services financial institutions subcommittee, are considering bills. Rep. Maloney is said to be working with Rep. Spencer Bachus, the committee’s lead Republican, to craft biparti-san legislation.

Meanwhile, Rep. Frank was focused on a bill that would rein in subprime lending standards. He introduced legislation Oct. 22 that would create licensing and registration standards for all mortgage originators and ban the use of compensation incentives, including yield-spread premiums, to steer borrowers into particu-lar loans. It also would create minimum standards requiring a borrower to be able to repay the loan, including taxes and insur-ance, and leave securitizers with liability if the loan did not meet

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certain criteria.The legislation sparked dis-

agreement among financial servic-es regulators. Comptroller of the Currency John Dugan and Office of Thrift Supervision Director John Reich argued that provi-sions of the bill were too subjec-tive, including language that says a loan must be in the borrower’s best interests. However, FDIC officials were broadly supportive of the bill and even said it should go further in some areas.

Mr. Reich argued that the bill should create a national standard that preempts state consumer protection laws, but FDIC Vice Chairman Martin Gruenberg said the bill should serve as a floor, not a ceiling.

The objections ultimately spurred Rep. Frank to ease pro-visions on the bill to make it more palatable to the financial services industry and regulators and win Republican support. The bill passed the House Financial Services Committee on Nov. 6 by a 45 to 19 vote, and was expected to be approved by the full House by yearend.

It was unclear, however, if the legislation or something like it would get traction in the Senate.

Sen. Dodd announced Sept. 5 that he would introduce a mort-gage reform bill to hold lend-ers accountable for brokers and appraisals and to rein in sev-eral products, such as no- and low-documentation loans. But by press time he had not intro-duced a bill, and other lawmakers seemed to have differing takes on how to proceed.

Legislation that would allow a first-lien mortgage to be reworked during bankruptcy proceedings was also on the agenda for both chambers of Congress. A House Judiciary subcommittee, spurred

largely by a rising tide of foreclo-sures, approved a bill in October. Senate Majority Whip Richard Durbin introduced a similar bill that would let bankruptcy judges lower a mortgage’s interest rate and extend its maturity up to 30 years. It was unclear if there was enough support or time left in the legislative calender for either bill to pass, however.

Industry representatives opposed the legislation, saying it could destabilize the value of mortgage portfolios. Bankers also worried the effort would be broadened to undercut the bankruptcy reforms enacted two years ago — one of the industry’s few legislative victories in recent years. Sen. Dodd said Oct. 9 that the “anti-consumer” provisions of the bankruptcy law should be repealed.

While Congress drew most of the attention in Washington, reg-ulators also were busy — often fighting one another.

The primary battleground was

the long-awaited Basel II capital proposal. The Treasury began lob-bying in May to force the regu-lators to agree on a final rule, noting that test runs of the plan are supposed to begin next year. But the FDIC and the Fed were divided on several issues, includ-ing how far overall capital levels should be allowed to drop and whether banks should be forced use the advanced approach or allowed to use a more simplified version allowed in the European version of the accord to calculate capital requirements.

On July 19 the regulators announced that they had finally reached consensus, agreeing to lift any restrictions on how far the industry’s capital may fall. However, they also said they would study the issue in two years to re-evaluate keeping the floors. Regulators also demand-ed that banks use the advanced approach, despite protests from several large banking companies.

Though a final rule had been

expected quickly, regulators took until early November to final-ize the plan. Implementation is expected to begin early next year.

Regulators also debated how to respond to the ongoing credit crisis and the rise in foreclo-sures.

Ms. Bair was the most vocal about finding a solution to ris-ing delinquencies; she said in September that servicers should seek to engage in broad restruc-turing of nondelinquent hybrid subprime mortgages. She argued that case-by-case restructuring was not occurring, and that all such loans could be converted into fixed-rate products.

The voluntary plan won praise from such disparate places as the editorial pages of The Wall Street Journal and The New York Times, but it appeared to hit a brick wall with Mr. Paulson, who said the Bush administration was not considering broad loan modifications.

As new debates popped up during the year, a perennial one may finally have been put to rest. The Supreme Court ruled 5-3 on April 17 that operating subsid-iaries of national banks enjoy the same preemption from state laws on consumer protection as the banks themselves. The case was preemption’s biggest test in a decade and a victory for the Office of the Comptroller of the Currency, which issued controver-sial rules in 2004 asserting broad authority to preempt state laws.

Though state regulators and some Democratic lawmakers decried the ruling in Watters v. Wachovia, most appeared to accept the idea that the preemp-tion question had been resolved, at least for the time being.

“We can’t undo preemption — that is just … a practical fact,” Rep. Frank said.

Finally, the specter of Home Loan bank consolidation resur-faced during the year. After American Banker began investi-gating, the Home Loan banks of Chicago and Dallas confirmed in July that they were considering a merger — the first consolidation in the Home Loan Bank System in 60 years. The idea faces a host of practical problems, including the concern that the potential for cost savings is slim.

TECHNOLOGY

Consolidation continued among banking technology vendors, but this year the names and prices seemed bigger than ever.

First Data Corp. announced in April that it had agreed to a $29 billion private-equity buyout by Kohlberg Kravis Roberts & Co. Despite some hurdles thrown up by the summer’s credit melt-down, the buyer’s financing came through, and the deal, one of the

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biggest leveraged buyouts ever, closed on schedule in September.

Just a day after that deal was announced, M&I said it would spin off its technology subsidiary, Metavante Corp. In June, Discover

Financial Services LLC became an independent company, and in October, NCR Corp. completed its spinoff of Teradata Inc. to focus on its core business of producing automated teller machines and

point of sale terminals. In October, Synovus announced

a long-awaited deal to spin off its majority stake in the processor Total System Services Inc.

For a brief period, it looked

like Fidelity National Information Services Inc.’s $1.8 billion acquisi-tion of eFunds Corp. in September would help it wrest the title of biggest banking technology ven-dor from Fiserv Inc., which has

held the top spot on American Banker’s FinTech 100 list since it was inaugurated in 2004.

However, Fiserv, which had been keeping a low profile for much of the past year while under-going a major internal review, came out of its shell in a big way in August by announcing that it would acquire the top bill-pay-ment service provider, CheckFree

Corp., for $4.4 billion.On the payment front, Capital

One made waves by testing a debit card that routes transactions across the automated clearing house system, rather than traditional debit networks, and lets issuers to offer cards that will connect to any customer’s bank. Though the idea is still in development, some bankers are concerned about a card that could sever the link between two services long viewed as inseparable.

Many financial companies also began rolling out mobile bank-ing services this year. The top use may be checking balances while waiting in line at a store to determine if a debit account has enough money to cover a purchase.

Merchants and payment ven-dors have been testing a vari-

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For additional information, please contact Joylyn Yaw at 800-367-3989 or email [email protected].

REPRINTS & WEB RIGHTSAdd an exciting dimension to your marketing and communications programs.


ety of options for helping people spend money electronically with-out using credit or debit cards. Many of these systems are aimed at online transactions, including charging purchases to a phone bill and sending person-to-person transfers with instant messaging software. Others are designed to be used at the point of sale; sev-eral use ACH transactions, while a few use phone technology to facilitate purchases or zap digital cash to a friend’s account.

There also was some action in corporate payments, a market that has lagged far behind the consumer one.

In March, American Express Co. introduced an electronic busi-ness-to-business payment service aimed at big corporate customers and based on the technology it gained by buying Harbor Payments Inc. in December 2006. In May, JPMorgan Chase acquired the electronic invoicing provider Xign Corp. and said it would incor-porate some of the Pleasanton, Calif., vendor’s technology into its purchasing card business.

INVESTMENT PRODUCTS

In the world of wealth manage-ment and investment products, it was a year of domestic consolida-tion and international expansion.

The year was highlighted by B of A’s acquisition of U.S. Trust Corp. from Charles Schwab Corp. to reshape its wealth manage-ment arm and Wachovia’s acqui-sition of A.G. Edwards & Sons Inc. to develop its brokerage scale.

After completing its $3.3 bil-lion acquisition, B of A kept the U.S. Trust name front and cen-ter, renaming its global wealth and investment group U.S. Trust, Bank of America Private Wealth Management. The Charlotte com-pany also enhanced its alternative

investment group and continued to add private bankers nationally to develop its wealth manage-ment capabilities and sales.

Other large wealth manage-ment companies fell victim to consolidation.

In August the New York insurer Marsh & McLennan Cos. Inc. sold Putnam Investments, a Boston fund company that has had heavy outflows since facing regulatory scrutiny in 2004, for $3.9 billion to Great-West Lifeco Inc., a unit of Toronto’s Power Financial Corp. Marsh & McLennan said it would use the proceeds to buy back $1.5 billion of stock and pay down debt by $1 billion.

Rumors of consolidation were rampant in the brokerage busi-ness. In August speculation swirled of a merger between E-Trade Financial Corp. and TD Ameritrade Holding Corp.

Consolidation also hit the trust banks. In July, Bank of New York Co. completed its $18.3 billion acquisition of Mellon Financial Corp. to form Bank of New York Mellon Corp., the world’s largest custody bank, with more than $20 trillion of assets under custody and $1.1 trillion of assets under management.

State Street Corp. became the largest hedge fund administra-tor and the second-largest global custodian, with $12.3 trillion of assets under custody, when it completed its $4.2 billion pur-chase of Investors Financial Services Corp.

Executives at State Street said throughout the year that it planned to expand its busi-ness internationally to the point where it generated 50% of its revenue from foreign markets. Last year the percentage of its revenue generated outside the United States rose 4 percentage

points, to 43%, but the Investors Financial acquisition pulled that figure back down to 39%.

Other large trust companies expressed a desire to expand internationally. An executive at Bank of New York Mellon said its international business could generate half its revenue and earnings within five to 10 years, versus about 25% now, and Northern Trust Corp. of Chicago opened offices in Amsterdam and in Limerick, Ireland.

On the product side, it was a year of resurgence for variable annuities, as market conditions forced investors to consider a product that guaranteed their principal. In the first half of this year net assets held in variable annuities increased 15.3% from a year earlier, to $1.5 trillion.

Health savings accounts and

unified managed accounts also had strong gains as the products gained broader acceptance in the market.

Information Strategies Inc., a Ridgefield, N.J., company that tracks HSA growth, said the num-ber of accounts tripled last year, to 3.6 million, and would reach 8 million by the end of this year. The product amassed $5.1 bil-lion of new deposits at finan-cial institutions last year, and Information Strategies projected that the total would reach $13.6 billion this year.

Many banking companies have started offering the health accounts since they were autho-rized in late 2003. The leaders include JPMorgan Chase, Wells Fargo, and Bank of New York Mellon, as well as smaller firms such as Webster Financial Corp.’s

HSA Bank and UnitedHealth Group Inc.’s Exante Bank.

Unified managed accounts are used to package multiple invest-ment products, such as separately managed accounts, mutual funds, and exchange-traded funds, with-in a single, fee-based account.

According to the Money Management Institute, only 4.7% of the $748.5 billion of separately managed account assets were in unified accounts, but high-end advisers have been moving their clients into such accounts at a brisk pace this year. Dover Financial Research, a Boston con-sulting firm, said that 11% of the banks it surveyed were offering unified accounts, and 67% were developing or planning to build a platform within 12 months.

By Niamh Ring, Marc Hochstein, Harry Terris, Alan Kline, Rob Blackwell,

Will Wade, and Matt Ackermann

New

sCom


YEAR IN QUOTES

The Industry in Its Own Words“Nobody sees the whites of the eyes of the bad credit qual-ity, outside of subprime — yet everybody says it can’t get any better. … It’s got to materialize at some point.”

Terry Maltese, portfolio manager of Sandler O’Neill Asset Management. Jan. 2

“Absent something that I don’t know about, we’ve got our plate full, and job one is taking care of the two integrations we have under way and doing a good job on overhauling our sales and service platform.”

Scott Custer, the chairmanand chief executive officer

of RBC Centura. Jan. 5

“The biggest job we have is to improve the perfor-mance of our U.S. con-sumer busi-ness — and I’m going

to repeat my mantra of [being] cautiously optimistic — but we cannot have 40% of the whole company with no real revenue growth dynamic to it.”

Charles O. Prince, then the chairman and CEO of Citigroup.

Jan. 22

“I see a triangledevelopinghere in the commer-cial credit space: credit risk, liquid-ity risk, and

reputation risk … and a lot of this is arising because of the changing role our banks have taken in terms of originating but not necessarily holding a lot of credit risk.”

Kathy Dick, the Office of the Comptroller of the Currency’s deputy comptroller for credit

and market risk. Jan. 22

“Until you get four, five banks, maybe six banks who cannot

grow because of the cap, … that’s when I think it kind of gets Congress’ attention.”

Brian Gardner, a policy analyst at KBW Inc.’s Keefe, Bruyette &

Woods, on Bank of America’s effort to adjust the 10% deposit share cap.

Jan. 23

“There was a time when Wall Street firms were chasing you down and wouldn’t leave you alone to buy loans. But now it’s like they’re doing you a favor.”

Raymond Eshaghian, the chairman and CEO of TMSF

Holdings, the Los Angeles parent of Mortgage Store Financial.

Jan.25

“I’m not going to commit to any legislation at this point. This is one hearing. We’ve got a lot of different bills that have been around over the years, and we want to sit down and decide where we want to go with this.”

Senate Banking Committee Chairman Chris Dodd, on

potential card legislation. Jan. 26

“The extension will allow Congress a reasonable interval to determine whether and on what terms commercial ustrial banks.”

Federal Deposit Insurance Corp. Chairman Sheila Bair, announcing

a yearlong extension of its morato-rium on commercial industrial loan

company applications. Feb. 1

“Is it a lot of money? Yeah, but we’re a bank, and we’ve done the math. We know it’s a cost-effective way of reaching our audience.”

Joe Bartolotta, senior vice president at Eastern Bank, on the

cost of the Boston company’s Super Bowl advertising. Feb. 2

“I really would not be surprised if some banks throw up their hands and say, ‘This just isn’t viable.’ Congress is going to have to decide if they want to have a private lending program or not, and it looks like they are

headed in the wrong direction.” Joe Belew, the president of the Consumer Bankers Association,

on legislation to reduce subsidies for student lenders. Feb. 6

“We are almost fed immedi-ately to the wolves.”

The Rev. Jesse Jackson,

on minorities forced to turn

to predatory lenders after banks deny them credit. Feb. 8

“The old arrogance is creeping back into both companies. It’s history repeating itself. … They are always out front saying, ‘Yes, we want a bill,’ but then they play the game to a stalemate.”

Armando Falcon Jr., the former director of the Office of Federal

Housing Enterprise Oversight, on lobbying by government-sponsored enterprises on a

regulatory reform bill. Feb. 12

“The environment is creating a lot of M&A, but we are in a situ-ation where we probably have an imbalance between buyers and sellers. There are too many sellers and not enough buyers.”

Brian Sterling, the co-head of investment banking at Sandler

O’Neill & Partners LP. Feb. 13

“I just don’t see his fingerprints on banking at all. It sounds like he’s trying to avoid embroiling himself in controversial issues.”

Gil Schwartz, a partner at Schwartz & Ballen LLC, on Federal

Reserve Board Chairman Ben Bernanke’s first year in office.

Feb. 14

“I must say that I am not com-fortable with the position we find ourselves in today on Basel II. I do not find the Basel II status quo appealing, and I am very concerned with the tenor of some of the more recent public debate.”

Ms. Bair. Feb. 27

“We’re here really to provide the tools, not to make the judgments.We’re really trying to create that

sense of an eBay for money.”Chris Larsen, the CEO of Prosper

Marketplace. March 1

“I don’t want to be too sophisti-cated here, but 2007 is going to suck, all 12 months of the calen-dar year.”

Donald Tomnitz, the chief executive of the home builder

D.R. Horton. March 8

“When data breachesoccur, acquiringbanks and issuingbanks do not notify or share

that information about exposed cards with alternative payment providers like eBay or PayPal. Therefore, we are tremendously disadvantaged.”

Meg Whitman, the president and CEO of eBay.

March 12

“There is a fine line between integrating an insurance agency and killing the sales and entre-preneurial spirit that made them successful to begin with.”

Daniel Cantera, regional president at First Niagara

Financial Group. March 13

“My hope is that we’ll pass legislation that’ll prohibit some of the practices that have made it so difficult for people to manage their financial affairs. The abuses by financial institu-tions in making it impossible for people to get out from underneath these financial problems are causing us seri-ous, serious problems.”

Sen. Dodd, on credit cards. March 14

“The savings kept get-ting smaller, because the big banks kept lower-ing the fees for us. The business

plan was getting a bit weaker. So we captured a good portion of the savings already.”

Jane Thompson, the president of Wal-Mart Financial Services,

explaining the retailer’s decision to drop its bid for a Utah ILC. March 19

“There is a growing sense of urgency in Congress that some-thing needs to be done. To the degree that Congress … legis-lates only to the headline or an anecdote, it will almost certain-ly multiply the unintended con-sequences of its legislation.”

Kurt Pfotenhauer, chief lobbyist for the Mortgage Bankers Association, on rising foreclosure

numbers fueling demand for predatory lending legislation.

March 21

“Theseactions set the condi-tions for the perfect storm that is sweeping over millions of American

homeowners today. The obvious question here is why hasn’t the Fed acted.”

Sen. Dodd, blaming the Fed for the rise in alternative mortgage

products and the subsequent problems with subprime loans.

March 23

“We have a good retail opera-tion, but it is not great like the commercial bank is, and we need to change that. It’s OK to be good, or average, but compe-tition is fierce here in the state. We’ve got to find our place in retail banking and be very suc-cessful there.”

Philip B. Flynn, UnionBanCal’s chief operating officer. March 27


“Our customers kiss us good-bye. How many other banks can say that?”

Joseph T. Curcio, director of marketing for Ridgewood Savings

Bank in New York, on why it sends a mobile branch to group homes for senior citizens even though the ser-

vice is not a big moneymaker. April 3

“Seems like every week we are writing a check to someone to come in and audit our books.”

Jeff Nager, senior vice president at Community South

Bank of Parsons, Tenn., on the cost of compliance.

April 5

“We can’t afford to let these bor-rowers who are staring down the barrel of foreclosure lose their

homes, and our local communi-ties cannot afford the high-cost stakes of foreclosure.”

Sen. Charles Schumer, on rising foreclosure figures.

April 12

“Relief is urgently needed for the hundreds of thousands of households at risk of losing their homes after being hit with payment shocks built into their mortgages.”

Allen Fishbein, housing and credit policy director for the

Consumer Federation of America. April 13

“I don’t like to predict anymore. People kind of throw my predic-tions in my face.”

Mr. Prince of Citi. April 17

“We hold that Wachovia’s mortgagebusiness,whetherconductedby the bank itself or

through the bank’s operating subsidiary, is subject to OCC’s superintendence, and not to the licensing, reporting, and visitorial regimes of the several states in which the subsidiary operates.”

Justice Ruth Bader Ginsburg, in the Supreme Court’s ruling on

Watters v. Wachovia. April 18

“It was happening a little too fast, a little prematurely. There is distrust between lenders and the consumer advocates. … It’s a very polarized political environment.”

Mr. Pfotenhauer of the MBA, on lenders that were unwilling

to sign Sen. Dodd’s statement of principles immediately to prevent

foreclosures. April 20

“It’s interesting that people can take good news” like an equity gain “and turn it into something negative.”

Thomas Wurtz, the chief financial officer of Wachovia Corp. April 23

“Statement 159 is not intended to provide an opportunity for finding ways to record losses directly to retained earnings. The standard is designed to pro-mote fair-value measurements. … After a company has dis-cussed the matter with its audit committee and independent auditor, we are very open to providing our views on the com-pany’s specific fact pattern.”

Jim Kroeker, deputy chief accountant of the Securities and Exchange Commission. April 23

“We believe we can materiallyimprove the performanceat LaSalle through our broader and more sophis-

ticated platform on both the commercial and retail side.”

Kenneth D. Lewis, the chairman, president, and CEO of

Bank of America. April 24

“You have to clearly define what is predatory lending. … Products and finances flow from state to

state, so having a federal preda-tory lending law, I believe, is incredibly important.”

Sen. Robert Menendez, D-N.J. April 25

“There is plenty of loan growth out there. But you can’t make any money at it.”

Rene Jones, the CFO of M&T Bank. April 27

“All of a sudden we’d be labeled a predatory lender who’s ripping the customer off, and we’d be between a

rock and a hard place. It’s not worth the regulatory hassle.”

Hans Ganz, the CEO of Pacific Trust Bank, on making small-dollar

loans to military personnel. May 1

“There is a whole area of peo-ple for whom moral persuasion won’t work. That’s who you aim legislation at, and that’s what we are doing. You are not going to get some of the companies to sign up to principles, because they knew exactly what they were doing.”

Sen. Schumer, on a bill he introduced to reform

subprime lending standards. May 4

“The U.S. after 9/11 has been in war mode, and our regulatory agencies have been ordered by the government, Congress, and the administration to be the first line of defense on financial crime. That has bred a lot of enforcement activity.”

Eugene Ludwig, the former comptroller of the currency.

May 11

“The pro-posal is intendedto balance potentialbenefits to consum-ers with compliance

burden.”Gov. Randall S. Kroszner, on the

Fed’s nearly 800-page plan to redesign card disclosures.

May 24

“It’s like a book to me. You cover the thing for so long, and you want to know what’s going on behind the scenes. Well, this is the one chance to know

what’s going on behind the scenes.”

Tien-Tsin Huang, JPMorgan Securities analyst, on the 213-page

proxy for Kohlberg Kravis Roberts Co.’s deal for First Data.

June 4

“There are clearly times in interest rate, credit, and eco-nomic cycles where the prudent thing is not to grow. I think we are in one of those times. There is just so much competition out there for credit that we may need some type of shock or event to get risk appetites back to a more reasonable level.”

Anthony Davis, an analyst with Stifel, Nicolaus & Co. June 11

“It’s going to take a while for the housing market to play through. It took us five or six years to go up — it’s going to take more than 20 minutes to come down.”

Nancy Wentzler, chief economist at the OCC. June 11

“The notion that somehow we’re the glue that holds it all together is really a lot of wish-ful thinking.”

Thomas M. Petro, the president and CEO of Fox Chase Bancorp, on

mutual thrifts. June 12

“The key question is, why can’t you refinance into a 30-year fixed? If you have been a bor-rower” who has been “making payments at the starter rate, why can’t you just put them into a fixed rate at that rate?”

Ms. Bair, on modifying adjust-able-rate mortgages. June 14

“It’s use it or lose it. … If the Fed doesn’t start to use that authority to roll out the rules, then we’ll give it

to someone who will use it. … The Fed is not the best place for consumer protection.”

House Financial Services Committee Chairman Barney Frank,

on the Fed’s lack of rules defining unfair and deceptive practices.

June 14

“They’ve built a 14-lane highway when they only need

eight lanes right now.” Brett Rabatin, an analyst at First

Horizon’s FTN Midwest Securities Research in Nashville, on the

excess of Korean-American banking companies in Los Angeles.

June 25

“The Fed has not used its mandate to protect con-sumers, or if they do use it, they do it very late. Whether the

issue is subprime lending or credit card practices or bank fees or today’s credit reports, the problem of Fed inaction seems to be a consistent theme.”

Rep. Carolyn Maloney, the chair-woman of the House Financial Services financial institutions

subcommittee. July 3

“The reality was that the differencesbetween the two orga-nizationsnarrowedand nar-rowed to the

point that it was really hard to distinguish — except maybe on tactics — where we differed on an issue.”

Diane Casey-Landry, the president of America’s Community Bankers, on its decision to merge

with the American Bankers Association. July 17

“We plan to exercise our author-ity under the Home Ownershipand Equity ProtectionAct to

address specific practices that are unfair or deceptive. Based on the information we are gath-ering, I expect that the board will propose additional rules under HOEPA later this year.”

Fed Chairman Ben Bernanke. July 19

B of A is “well positioned going into the second half of 2007, with additional upside in 2008.”

Mr. Lewis. July 20

www.sourcemediaconferences.comwww.americanbanker.com

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“Our biggest concern is that the whole process would fall apart. We wanted to move

forward with the advanced approaches and move forward to completion.”

Comptroller of the Currency John Dugan, on regulators reaching

a deal on Basel II. July 23

“Anytime a regulator issues a document like this, it’s a little like a college professor giving an open book test; he expects the answers to be better.”

David Caruso, the CEO and managing director of Dominion

Advisory Group in Centerville, Va., on guidance from five federal agencies spelling out how to

obey the Bank Secrecy Act. July 20

“We’re goingthrough a lit-tle pain, … but I think a year or two out we’re going to be very happy

that we did this deal.” G. Kennedy Thompson, the

chairman, president, and CEO of Wachovia, on its acquisition of

Golden West Financial.July 23

“We’re all watching credit. You’re watching credit. We’re watching credit.”

Mr. Prince. July 23.

“There are definitely concerns that some [originators] might not be in business six months from now. I have clients that are running up their personal credit cards and selling real estate, even in this market, to stay afloat.”

Michele Perrin, a first vice presi-dent and relationship manager for warehouse lending at Washington

Mutual. July 24 (two months before Wamu closed her division)

“What we need to do is to flesh this out, and that will take some time. What you’ve never

seen before is this type of policy statement led by the Treasury secretary with all of the bank regulators behind it. That’s a commitment to success in this area.”

James Freis, the director of Financial Crimes Enforcement

Network, on the Treasury Department’s plan to review

the BSA burden for banks. July 30

“We’re going to grind our way through this environment.”

Michael Perry, IndyMac Bancorp’s chairman and CEO. July 31

“I’m sure a lot of other institu-tions will come right behind them and say, ‘If they can get $3, so can we.’ ”

Mike Marzec, manager of electronic banking at First

Horizon, on B of A’s plan to charge non-customers $3 to use its automated tellermachines.

Aug. 3

“Everyone says the fundamen-tals are good and the technicals are bad. But it’s always a one-two punch with technicals lead-ing a slowing trend, especially the type of technical correct we are experiencing.”

Anthony Clemente, the president of Canaras Capital Management.

Aug. 8

“If I were president,I would addressabusesacross the mortgageindustrywith a plan

to curb unfair lending practices and hold brokers and lenders accountable, give families the support they need to avoid fore-closure, and increase the supply of affordable housing.”

Sen. Hillary Rodham Clinton. Aug. 8

It is “silly to argue that we’re just going to bounce and keep going from where we are. The banking and financial complex is going to be under a cloud for at least a year to 18 months.”

Chris Whalen, managing director of Lord, Whalen’s

Institutional Risk Analytics. Aug. 8

“If enough financial pressure is placed on Countrywide, or if the market loses confidence in its ability to function properly, then the model can break, leading to an effective insolvency. … If liquidations occur in a weak market, then it is possible” for Countrywide “to go bankrupt.”

Kenneth Bruce, an analyst at Merrill Lynch. Aug. 16

“The banks have been whiningabout losing ground to the mortgage underwritersand the bro-kerage hous-

es, but the pendulum is going to swing back. … Ultimately, the banking industry will be the strongest and dominant element in the distribution channel.”

D. Anthony Plath, a professor of finance at the University of North

Carolina at Charlotte. Aug. 20

“It is pretty ironic that after three to four years of delibera-tions about excess liquidity in the world economy, the finan-cial system seems to be threat-ened by an absence of liquidity. … That just confirms the fact that liquidity is one of the least well understood concepts in modern finance.”

Pierre Cailleteau, the chief econ-omist of credit policy at Moody’s.

Aug. 20

“A lot of banksare being lumped into being part of the problem, when in reality they aren’t. We’re

correcting that misunderstand-ing and showing that in many instances the banking industry is the solution.”

Eric Skrum, a spokesman for the Wisconsin Bankers Association, on

campaigns to blame unregulated mortgage lenders — and not bank-ers — for the mortgage meltdown.

Aug. 21

“This is the first time that I’ve been through such a cycle. When the second wave hit, we were left with the choice of

massivelyputting loans on our bal-ance sheet or shutting it down. We didn’t feel that we were in the

position to underwrite the risk in order to hold it. It’s a lot hard-er to ride the cycle down when the destination on the other side is so unclear.”

Richard Fairbank, the chairman of Capital One, on closing

Greenpoint Mortgage Funding. Aug. 21

“BeingItalian, it boils my blood,because I can deal with any-thing, but not with

blatant and vicious unfairness. To use the word bankruptcy as a professional analyst, and to not realize the impact it would have on depositors of the bank, was irresponsible. That kind of statement can cause companies to go bankrupt.”

Angelo Mozilo, the chairman and CEO of Countrywide, on

Mr. Bruce’s note. Aug. 24

“Politically, it’s a tough sell. It looks like you’re bailing out rich homeowners.”

Paul Miller, an analyst at Friedman, Billings, Ramsey’s FBR Capital Markets, on calls to raise

the conforming loan limit above $417,000. Aug. 28

“We also have to rec-ognize what will happen if we reward the mortgage industry’s lobbying:They will

keep using the same kinds of deceptive practices to make a quick buck, no matter what the consequences to homebuyers and their communities.”

Sen. Barack Obama. Aug. 30

“If it took us this long to do one, I doubt we’re going to hurry up and do another one.”

Edward Seserko, the president and CEO of the 120-year-old Eureka Bank, on its decision to add a sec-

ond branch. Sept. 4

“It is clear that regulation and market intervention has a big-ger role to play than some of the conservatives were arguing a few months ago. That doesn’t mean that they agree with us on everything, but I think we’ve crossed a big barrier, and we are now into specifics, rather than this ideological divide.”

Rep. Frank, on mortgage reform legislation. Sept. 4

“This admin-istration will soon issue regulationsthat require mortgagebrokers to fully dis-close their

fees and closing costs. … If you’ve been cheating somebody, we’re going to find you and hold you to account.”

President Bush. Sept. 4

“The single biggest concern in the mortgage space is asset quality, because nobody believes the ratings agencies, the originators, or Wall Street.”

Larry Goldstone, the president and chief operating officer of Thornburg Mortgage. Sept. 5

“The government has got a role to play, but it is limited. A federal bailout of lenders would only encourage a recur-rence of the problem. It’s not the government’s job to bail out speculators, or those who made the decision to buy a home they knew they could never afford.”

President Bush. Sept. 6

“Predatory lending needs to be stopped, which is why I intend to introduce legislation that will put an end to the practices that have forced thousands of Americans into foreclosure.”

Sen. Dodd. Sept. 6

“It’s snob appeal. People want to demonstrate their success.”

John Mathenny, director of sales and marketing for Brintech, on how

private banks are attracting custom-ers by offering concierge services.

Sept. 11


“Things are not going that well for bin Laden. Not only do most intel-ligenceexpertssay he’s

lost much of his power over al-Qaida, but it turns out he got one of those subprime loans a couple of years ago. He could lose the cave.”

Jay Leno, the host of“The Tonight Show.” Sept. 17

“This is what I’d call a golden opportunity for Respa reform if there ever was one.”

Robert Davis, ACB’s managing director of government relations.

Sept. 17

“It sets the stage for the future.”

AlfredDelliBovi,

the president and CEO of the Federal Home Loan

Bank of New York, on the Dallas and Chicago banks’ plan to merge.

Sept. 18

“The Senate now must act. The case cannot be stronger for the Senate to take up GSE reform legislation.”

Treasury Secretary Henry Paulson. Sept. 21

“If the FDIC did this, they’d be in trouble.”

Alan Theriault, a consultant with CU Financial Services, on the deci-sion by credit union regulators not

to disclose that they had taken over a Colorado credit union.

Sept. 24

“We are concerned that various aspects of the bill … are more confusing to consumers and very difficult, if not impossible, for financial institutions.”

Floyd Stoner, lead lobbyist for the ABA, on a bill to limit

overdraft charges. Sept. 25

“We want to help people stay in their home, provided they have the financial ability to do so. But we have to make sure they’re going to be successful and the loan is going to perform. We

can’t do a modification just for the sake of it.”

J.K. Huey, senior vice president of home loan servicing at IndyMac.

Sept. 26

“There is plainly a state of dis-equilibrium when it comes to consumer protection for credit cards, and the system needs fix-ing. In my view, the fixing ought to begin with credit card compa-nies adjusting their own behav-ior, without being forced to do so by new laws or regulations — in recognition of the intensity of consumer complaints.”

Mr. Dugan of the OCC. Sept. 27

“We have this huge problem on our hands, and we can’t do this kind of case-by-case,laborious

restructuring process with all these millions of loans. I think some categorical approaches are needed.”

Ms. Bair Sept. 28

“The institution had no remain-ing prospects for raising capital and achieving profitability.”

The Office of Thrift Supervision, announcing the failure of the

$2.5 billion-asset NetBank. Oct. 1

“There is no market discipline in this instance. This may be supporting a new theory called ‘too big to be hurt.’ ”

Karen Shaw Petrou, managing director of Federal

Financial Analytics, on the creation of the master liquidity

enhancement conduit to bolster the commercial paper market.

Oct. 1

“A great franchise became available unexpect-edly. Our currency at the same time gained

considerable strength, both the Canadian dollar and TD shares.”

W. Edmund Clark, the president and CEO of Toronto-Dominion Bank,

after its TD Banknorth unveiled an $8.5 billion deal for Commerce Bancorp of Cherry Hill, N.J. Oct. 2

“By no means is this the end of the Commerce story.”

Dennis DiFlorio, the CEO of Commerce.

Oct. 2

“This envi-ronment … is more toxic than any of us have ever seen before.”

Larry B. Litton Jr., the

CEO of C-Bass’ Litton Loan Servicing. Oct. 11

“DO NOT SIGN THIS DOCUMENT IF YOU DON’T UNDERSTAND THE INFORMATION ABOVE.”

From a broker disclosure form Wamu introduced in October.

Oct. 11

“If you’re going to look at the financial structure, you have to look at why all these [regula-tory] organizations were cre-ated and how they were created and to what purpose they were created.”

David Nason, the Treasury’s assistant secretary for financial institutions, announcing a broad

regulatory restructuring initiative Oct. 12

“Sen. Dodd’s preoccupation with some other things, such as running for president, has not put him here on a timely basis, and so … even though there was a comprehensive bill [sum-mary] written, there’s been no one pushing it, and there’s been not much coordination between staffs.”

Sen. Jim Bunning, on the lack of progress on mortgage reform in the

Senate. Oct. 15

“I treat this quarter obvi-ously as a setback and a disappoint-ment, but I don’t treat it as a diver-sion from our

strategy.”Gary Crittenden, the CFO of Citi.

Oct. 16

“Prior to all this market dislocationof the third quarter, our capital ratios had been increasing at a time when

many of our competitors were reducing their capital ratios.”

Howard Atkins, the CFO of Wells Fargo. Oct. 17

“We believe that we can meet the challenges presented by this environment and do so without taking the risks that could jeop-ardize our future.”

Richard Davis, the CEO of U.S. Bancorp. Oct. 17

“We talk consistentlyand all the time about this fortress balancesheet, and we really mean it. And

we call it a strategic impera-tive, not just a philosophical position.”

James Dimon, the chairman, president, and CEO of JPMorgan

Chase. Oct. 18

“We have said for years now that you just don’t get paid for taking a lot of credit risk, so we’ve been sellers of credit risk for a decade. … Everybody says they have a great risk profile until they don’t.”

James E. Rohr, the chairman and CEO of PNC Financial Services

Group. Oct. 19

“I’ve had all of the fun I can stand in investment banking at the moment. So to get bigger in it is not really something I want to do.”

Mr. Lewis of B of A. Oct. 19

“We are reviewingall of our operationsin a very serious way. We know there is very little

tolerance left, given the disappointing earnings we

have been showing.”Jorge Junquera, the CFO of

Popular. Oct. 19

“You can rest assured that we will apply the lessons of the recent extraordinary market con-ditions to adjust our infrastruc-ture and governance and make our company even stronger, but you will not see substantial shifts in our business model.”

Mr. Thompson of Wachovia. Oct. 20

“We are setting a federal mini-mum standard, but we are not going to preempt state laws beyond that.”

Rep. Frank, on his bill to reform mortgage lending practices. Oct. 23

“The federal duty of care and anti-steering provisions — which include highly sub-jective requirements that mort-gages be ‘appropriate’ and ‘in the consumer’s interest’ — will be difficult to enforce and could significantly increase the litiga-tion exposure for all banks.”

Mr. Dugan of the OCC, on Rep. Frank’s mortgage reform bill. Oct. 24

“Let me say to our agen-cies testify-ing today that the report on minority banking … is an indict-ment on

your ineffectiveness. We do not believe that our agencies who are charged with this responsi-bility ... are doing enough.”

Rep. Maxine Waters, at a hear-ing on a Government Accountability

Office report on regulatory oversight of minority-owned banks. Oct. 31

“It is my judgment that, given the size of the recent losses in our mortgage-backed securities business, the only honorable course for me to take as chief executive officer is to step down.”

Mr. Prince. Nov. 4

“Online banking: We picked our heads up a couple of years ago and saw it was growing like a weed.”

Paul Rosenfeld, vice president of small-business solutions at Intuit.

Nov. 8

Q: How many people does it take to change a bank’s payments performance?

A: One enlightened banker and a team of advisors who turn information into actionable insights

Talk to us about how we can help you:

Contact us at 914.249.6524 or [email protected] or www.mastercardadvisors.com

Congratulations to the winners of this year’s Banker of the Year awards from MasterCard Advisors, the only global professional services firm focused exclusively on payments.

• Identify the most profitable business opportunities• Target customers more effectively• Optimize cardholder acquisition

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2007 Best in Banking · In Trying Times for PNC, Industry Jim Rohr is anything but flashy, but the...

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