WEBVTT NOTE This file was generated by Descript 00:00:00.000 --> 00:00:01.999 Julieann Thurlow: It really is the cumulative impact. 00:00:02.000 --> 00:00:06.159 When you think about higher capital requirements, lower fee income, 00:00:06.189 --> 00:00:10.179 because traditional fees that we've charged for years are now under attack. 00:00:10.229 --> 00:00:14.899 And at the same time you're spending more to implements software and technology 00:00:14.899 --> 00:00:19.299 that's necessary to track 1071, and and interchange revenue is also under attack. 00:00:19.309 --> 00:00:21.559 So it's coming from all different directions. 00:00:21.559 --> 00:00:25.519 It's a bunch of agencies writing a bunch of rules, and it's not coordinated. 00:00:25.519 --> 00:00:29.359 So it's coming at us all and it really does make bankers wonder whether or 00:00:29.359 --> 00:00:30.899 not they have a profitable future. 00:00:31.149 --> 00:00:32.829 Evan Sparks: From the American bankers association. 00:00:32.859 --> 00:00:34.869 This is the ABA banking journal podcast. 00:00:34.959 --> 00:00:35.589 Welcome back. 00:00:35.619 --> 00:00:36.459 I'm Evan sparks. 00:00:36.579 --> 00:00:39.519 Today's episode is presented by R&T Deposit Solutions. 00:00:40.059 --> 00:00:41.139 We're here in early April. 00:00:41.139 --> 00:00:43.599 It's just a couple of weeks after the ABA Washington summit, we 00:00:43.599 --> 00:00:47.079 had over a thousand bankers here in DC for a fantastic program. 00:00:47.289 --> 00:00:49.959 And I wanted to share with you one more conversation from the summit. 00:00:50.199 --> 00:00:53.149 It's with Peter Cook, our chief communications officer and my boss. 00:00:53.629 --> 00:00:56.929 Peter had a great conversation with four senior bank leaders. 00:00:57.139 --> 00:01:00.579 They talked about the economy, they talked about the the local economic 00:01:00.609 --> 00:01:03.609 conditions about how policy issues are affecting their bank and what they're 00:01:03.609 --> 00:01:05.079 most excited about for the future. 00:01:05.499 --> 00:01:08.709 So in the net in this next episode, you'll hear Peter's conversation 00:01:08.709 --> 00:01:11.559 with ABA chair, Julie Thurlow from Redding cooperative bank. 00:01:11.949 --> 00:01:16.229 You'll hear John Asbury, ABA chair-elect and from Atlantic 00:01:16.229 --> 00:01:17.789 union bank in Richmond, Virginia. 00:01:18.179 --> 00:01:20.069 You'll hear from Kenneth Kelly ABA. 00:01:20.129 --> 00:01:22.529 Vice-chair from first independence bank in Detroit. 00:01:22.859 --> 00:01:26.399 And ABA board member, Brent Beardall from WaFd Bank out in Seattle. 00:01:26.879 --> 00:01:27.659 Thanks for listening. 00:01:29.829 --> 00:01:32.239 Peter Cook: Thank all of you for being here . Always a highlight for me to 00:01:32.249 --> 00:01:36.329 be able to chat with our members, particularly for board members right now. 00:01:36.379 --> 00:01:39.579 We know where you're all from, but not everyone here may necessarily 00:01:39.579 --> 00:01:41.899 and some people watching on C SPAN, for example, may not know. 00:01:42.419 --> 00:01:44.319 All that much about your individual institutions. 00:01:44.319 --> 00:01:46.639 So Julie, as our chair, I'll ask you to go first. 00:01:47.159 --> 00:01:50.119 Tell us a little bit about your bank and just paint a picture of 00:01:50.119 --> 00:01:51.179 Reading Cooperative Bank for us. 00:01:51.189 --> 00:01:51.489 Julieann Thurlow: Sure. 00:01:51.779 --> 00:01:53.749 Reading Cooperative Bank is a mutual bank. 00:01:53.789 --> 00:01:55.229 We are in Boston. 00:01:55.499 --> 00:01:58.319 We're north of Boston, Massachusetts, about 15 miles. 00:01:58.319 --> 00:02:03.307 We actually cover from Lawrence to Lynn, if you're familiar with the North Shore. 00:02:03.307 --> 00:02:04.852 We are depositor owned. 00:02:04.872 --> 00:02:06.402 We were founded in 1886. 00:02:06.402 --> 00:02:08.412 And we're nine branch operation. 00:02:08.662 --> 00:02:11.902 I think I mentioned that we're 900 million in assets but our last couple 00:02:11.902 --> 00:02:17.432 of office have been intentionally opened in communities in minority, majority 00:02:17.452 --> 00:02:21.782 communities with an intent to address financial needs in those communities. 00:02:23.507 --> 00:02:24.487 Peter Cook: Kenneth, do you want to go next? 00:02:24.567 --> 00:02:25.487 Kenneth Kelly: Thank you, Peter, yes. 00:02:25.767 --> 00:02:26.597 Good morning, everyone. 00:02:26.597 --> 00:02:27.627 My name is Kenneth Kelly. 00:02:27.627 --> 00:02:30.127 I serve as Chairman and CEO of First Independence Bank, 00:02:30.127 --> 00:02:31.367 based in Detroit, Michigan. 00:02:31.857 --> 00:02:34.867 We've been in business now for going on 54 years. 00:02:34.867 --> 00:02:39.787 We were one of the positive outcomes of the 1967 riots in Detroit, becoming 00:02:39.787 --> 00:02:42.957 the first African American owned and controlled bank in the state of Michigan. 00:02:43.407 --> 00:02:48.017 We currently have actually operations in Minneapolis, Minnesota. 00:02:48.277 --> 00:02:52.257 Part of George Floyd's murder was the outcome of banks in that market said that 00:02:52.277 --> 00:02:53.927 we wanted to do something differently. 00:02:54.247 --> 00:02:58.947 And we got invited to come and look at the opportunity to expand into that market. 00:02:58.947 --> 00:03:01.977 And so, we're proud to represent the team there in Detroit that does a 00:03:01.977 --> 00:03:05.202 fine job every day trying to bring financial services to that community. 00:03:06.072 --> 00:03:06.372 Brent Beardall: Great. 00:03:06.842 --> 00:03:07.342 And Brent. 00:03:07.882 --> 00:03:09.072 Yeah, good morning, Peter. 00:03:09.072 --> 00:03:10.062 Thank you for having me. 00:03:10.062 --> 00:03:10.952 I'm from Seattle. 00:03:10.952 --> 00:03:13.752 So I need to pay tribute to Marshawn Lynch. 00:03:14.082 --> 00:03:14.732 I'm just here. 00:03:14.732 --> 00:03:15.732 So I don't get fined. 00:03:17.042 --> 00:03:18.032 Peter Cook: That is not true. 00:03:18.062 --> 00:03:18.412 They're no. 00:03:20.252 --> 00:03:22.042 Brent Beardall: The board fees are going to be withheld. 00:03:22.042 --> 00:03:22.612 I understand. 00:03:22.612 --> 00:03:24.932 No, I pleasure to be here. 00:03:24.932 --> 00:03:27.672 I have the good fortune of being the CEO of WaFd Bank. 00:03:27.672 --> 00:03:31.832 We are now a 30 billion dollar bank in the West Coast 9 Western States from 00:03:31.832 --> 00:03:33.402 Washington all the way down to Texas. 00:03:33.917 --> 00:03:39.607 We just completed an 8 billion acquisition of Luther Burbank Savings after 15 months 00:03:39.607 --> 00:03:41.317 of waiting to get regulatory approval. 00:03:41.327 --> 00:03:42.747 We finally got that done. 00:03:43.047 --> 00:03:45.557 We closed on the transaction at 11. 00:03:45.557 --> 00:03:47.947 59 on Thursday, February 29th. 00:03:49.032 --> 00:03:51.752 Then the next day, Friday, we closed the branches down, started the 00:03:51.752 --> 00:03:55.712 conversion, and I'm very pleased to report that on Sunday night at 8 p. 00:03:55.712 --> 00:03:55.912 m. 00:03:55.912 --> 00:03:57.062 We got it all done. 00:03:57.372 --> 00:04:00.722 So to my knowledge, one of the fastest close to conversions ever 00:04:00.982 --> 00:04:02.822 and we're net positive on deposit. 00:04:02.852 --> 00:04:04.122 So I'm a happy guy sitting on stage. 00:04:04.802 --> 00:04:05.042 Peter Cook: Great. 00:04:05.382 --> 00:04:05.952 And John? 00:04:06.032 --> 00:04:06.642 John Asbury: Thank you, Peter. 00:04:06.672 --> 00:04:07.862 We're Atlantic Union Bank. 00:04:07.892 --> 00:04:09.262 We operate throughout Virginia. 00:04:09.262 --> 00:04:11.002 We're a diversified full service bank. 00:04:11.002 --> 00:04:13.412 We're a little over 21 billion in assets. 00:04:13.422 --> 00:04:15.452 Our roots go back to 1902. 00:04:15.972 --> 00:04:19.432 While we are principally a Virginia bank, we do have some operations 00:04:19.432 --> 00:04:20.722 in Maryland and North Carolina. 00:04:20.822 --> 00:04:23.462 We also have a merger about to close on April 1. 00:04:23.492 --> 00:04:27.382 We are merging with a wonderful 114 year old Virginia community 00:04:27.382 --> 00:04:29.002 bank called American National Bank. 00:04:29.472 --> 00:04:32.392 Fine institution longtime friends of ours and they operate in the 00:04:32.392 --> 00:04:35.362 western and southern part of the state and North Carolina. 00:04:35.402 --> 00:04:40.092 So we're, we are excited about the expansion into North Carolina. 00:04:40.152 --> 00:04:41.202 So that was our story. 00:04:41.602 --> 00:04:44.882 Peter Cook: So four banks representing the diversity of the banking 00:04:44.882 --> 00:04:48.432 sector and many respects here in this country, the strength of, of 00:04:48.442 --> 00:04:49.612 the banking sector here in the U. 00:04:49.612 --> 00:04:49.752 S. 00:04:49.782 --> 00:04:50.312 and the fact that the U. 00:04:50.312 --> 00:04:50.442 S. 00:04:50.452 --> 00:04:53.702 is again, very different than so many other countries in terms of the depth 00:04:53.702 --> 00:04:55.212 and breadth of our institutions. 00:04:55.872 --> 00:04:56.662 How's business? 00:04:57.112 --> 00:04:59.902 If you had to write input as to the picture of the economy, the 00:04:59.902 --> 00:05:01.482 state of the economy right now. 00:05:01.927 --> 00:05:03.627 John, how is it? 00:05:03.627 --> 00:05:04.297 John Asbury: Pretty good. 00:05:04.387 --> 00:05:05.787 It's really a function of our markets. 00:05:05.797 --> 00:05:08.907 We're blessed in Virginia, which is where most of our exposure is and 00:05:08.937 --> 00:05:11.697 North Carolina, increasingly with two very good economies, Peter. 00:05:11.697 --> 00:05:14.497 So I would say it's, yeah, business is pretty good. 00:05:14.597 --> 00:05:17.937 You know, things have slowed a bit, but our commercial industrial 00:05:17.937 --> 00:05:19.287 clients are doing just fine. 00:05:19.387 --> 00:05:20.307 They're still liquid. 00:05:20.397 --> 00:05:23.217 They've been resilient on the commercial real estate side. 00:05:23.217 --> 00:05:24.977 And then we'll perhaps talk about that later. 00:05:25.337 --> 00:05:29.697 We're seeing fewer projects underway now being started mainly just because of 00:05:29.697 --> 00:05:32.987 the higher cost of interest rates, the amount of capital that needs to go in, 00:05:33.037 --> 00:05:35.157 equity in order to make the project work. 00:05:35.517 --> 00:05:37.167 The credit is quiescent. 00:05:37.187 --> 00:05:42.137 Credit continues to be very quiet and the fundamental health of our economy 00:05:42.147 --> 00:05:44.657 in which we operate in looks good to me. 00:05:44.747 --> 00:05:47.427 So slower but doing, doing fine. 00:05:48.357 --> 00:05:49.937 Peter Cook: Anyone have a different take on that? 00:05:49.937 --> 00:05:52.057 Is that what's happening in your, your neighborhoods? 00:05:53.307 --> 00:05:54.417 Julieann Thurlow: Things are good in Boston. 00:05:54.467 --> 00:05:56.637 Our delinquency is probably the lowest it's ever been. 00:05:56.637 --> 00:05:58.897 It's the lowest it's ever been since I've been in the, in the bank. 00:05:58.907 --> 00:06:01.447 So, consumers seem to be doing and faring well. 00:06:01.667 --> 00:06:04.587 From a commercial standpoint, I know there are rumblings, but commercial 00:06:04.657 --> 00:06:06.317 takes a lot of different forms. 00:06:06.407 --> 00:06:10.637 Multifamily office manufacturing, owner occupied real estate. 00:06:10.657 --> 00:06:14.487 So the diversity of our portfolios will support the strength of our organizations. 00:06:14.987 --> 00:06:15.007 Yeah. 00:06:15.817 --> 00:06:16.917 Peter Cook: Let me, let me follow up on that. 00:06:16.937 --> 00:06:19.057 Commercial real estate has been a hot topic. 00:06:19.057 --> 00:06:24.307 If you watch Any of the business news channels, which I used to work a 00:06:24.327 --> 00:06:27.197 few moons ago it's been a hot topic. 00:06:27.717 --> 00:06:32.817 Help the public audience understand what commercial real estate, your point, 00:06:32.827 --> 00:06:36.937 Julie, about commercial real estate, it, it, there's been an an effort to 00:06:36.937 --> 00:06:39.797 try and sort of generalize here, but you have to look specifically, don't you? 00:06:40.117 --> 00:06:40.737 Julieann Thurlow: I think so. 00:06:40.737 --> 00:06:44.147 And let's be honest, there are some zip codes, city centers that 00:06:44.147 --> 00:06:45.287 are going to have some difficulty. 00:06:45.537 --> 00:06:49.497 When people don't go to the office as often to do their work then they're 00:06:49.497 --> 00:06:52.487 going to be people that change their and renegotiate their leases. 00:06:52.487 --> 00:06:56.927 And so there will be some instability in certain sections of the portfolio. 00:06:57.107 --> 00:06:59.937 But the whole commercial portfolio is not actually exposed. 00:06:59.937 --> 00:07:02.837 And a lot of businesses, as John mentioned, C&I businesses 00:07:02.847 --> 00:07:04.467 are, are very strong right now. 00:07:05.467 --> 00:07:08.377 Brent Beardall: If, if I could, I'm on a personal vendetta 00:07:08.397 --> 00:07:10.647 to set the record straight. 00:07:10.717 --> 00:07:13.327 The sky is not falling on commercial real estate. 00:07:13.347 --> 00:07:14.047 Stop the madness. 00:07:14.882 --> 00:07:17.402 There are so many chicken littles out there on TV. 00:07:17.902 --> 00:07:18.642 Stop! 00:07:19.102 --> 00:07:21.352 There will be issues in pockets of commercial real 00:07:21.352 --> 00:07:22.642 estate, as Julie pointed out. 00:07:23.002 --> 00:07:25.052 I mean, in my mind, there's four things you need to know 00:07:25.052 --> 00:07:26.062 about commercial real estate. 00:07:26.222 --> 00:07:28.462 Number one is what category of commercial real estate. 00:07:28.722 --> 00:07:30.982 Saying commercial real estate is a bad thing is like saying 00:07:30.982 --> 00:07:32.402 the stock market is a bad thing. 00:07:32.752 --> 00:07:33.962 There's companies that are bad. 00:07:33.962 --> 00:07:35.152 There's companies that are overvalued. 00:07:35.152 --> 00:07:37.342 But overall, you have to take the broad. 00:07:37.342 --> 00:07:40.362 I mean, there's thousands of categories of commercial real estate. 00:07:40.692 --> 00:07:42.912 Number two is location. 00:07:43.392 --> 00:07:44.702 Location, location. 00:07:44.852 --> 00:07:46.572 Where, where's the real estate you have? 00:07:46.572 --> 00:07:47.132 It matters. 00:07:47.132 --> 00:07:48.842 Are you downtown Manhattan? 00:07:49.002 --> 00:07:49.822 Are you in Washington D. 00:07:49.822 --> 00:07:50.092 C.? 00:07:50.092 --> 00:07:51.382 Are you in Salt Lake City? 00:07:51.382 --> 00:07:56.032 I, I mean it, it matters a great deal where people and one statistic I 00:07:56.032 --> 00:08:00.262 wish we all had that to my knowledge nobody has a very good statistic is 00:08:00.262 --> 00:08:02.452 physical occupancy of office buildings. 00:08:02.822 --> 00:08:05.862 We all talk about occupancy, we talk about financial occupancy. 00:08:06.132 --> 00:08:07.342 That really doesn't matter. 00:08:07.392 --> 00:08:11.412 What matters is physical occupancy, because that means if your workers are 00:08:11.412 --> 00:08:14.592 coming in, you're going to renew your lease that comes to, then you need to 00:08:14.592 --> 00:08:16.562 understand how much equity is in the deal. 00:08:17.322 --> 00:08:19.732 If somebody only has 10 percent equity, they're going, they're 00:08:19.732 --> 00:08:20.582 going to walk pretty quickly. 00:08:20.582 --> 00:08:23.632 If they have 50 percent equity, they're going to be along for the ride. 00:08:24.252 --> 00:08:27.467 Then lastly, as we all know, the most important characteristic of 00:08:27.467 --> 00:08:28.932 those we lend to his character. 00:08:29.432 --> 00:08:33.732 So it is really hard to say, Oh, my goodness, you have a CRE concentration. 00:08:34.217 --> 00:08:37.637 I, I believe in what Warren Buffett said, a concentration can be a 00:08:37.637 --> 00:08:40.197 good thing if it's concentrated in the right place, or it can be 00:08:40.197 --> 00:08:43.467 a bad thing, but stop categorizing commercial real estate as bad. 00:08:43.467 --> 00:08:45.257 John Asbury: I think Brent makes some really good points, which 00:08:45.257 --> 00:08:46.577 is, it's not all the same thing. 00:08:46.587 --> 00:08:47.797 It is very localized. 00:08:47.807 --> 00:08:49.677 The nature of the properties are so different. 00:08:49.727 --> 00:08:52.157 What issues around the office are very different from 00:08:52.157 --> 00:08:53.717 apartment buildings and hotels. 00:08:53.717 --> 00:08:57.747 At the end of the day, the concern, the overarching concern is rates are higher. 00:08:58.107 --> 00:09:01.037 And so historically, commercial real estate has been a pretty 00:09:01.037 --> 00:09:02.317 good hedge against inflation. 00:09:02.822 --> 00:09:07.082 So we look at multifamily apartments in our markets and rents are still going up. 00:09:07.482 --> 00:09:10.712 And so cash, sure, debt service is higher, capitalization rates are 00:09:10.712 --> 00:09:13.602 higher, which suggests values go lower, but cash flows are up too. 00:09:14.102 --> 00:09:17.302 It's not true for office, you know, office is a whole different conversation. 00:09:17.312 --> 00:09:18.902 That's not so much about interest rates. 00:09:18.902 --> 00:09:21.982 That's more about just sort of a structural change in the nature of work. 00:09:22.502 --> 00:09:26.182 But then it comes down to, are you talking about high rise office buildings 00:09:26.182 --> 00:09:30.352 and, you know, major metro areas or are you talking about like suburban, 00:09:30.522 --> 00:09:33.922 single story, mid rise office buildings typically leased to local tenants? 00:09:34.562 --> 00:09:38.382 Who are less supportive of remote work, hybrid work, et cetera. 00:09:38.392 --> 00:09:41.442 It is all about, are you using the office space or not? 00:09:41.452 --> 00:09:44.122 So, Peter, I think it's, it's just not one thing. 00:09:44.122 --> 00:09:46.612 And there's a lot of press about rent control department buildings. 00:09:46.612 --> 00:09:48.772 And that's, yeah, that's a very localized issue. 00:09:48.772 --> 00:09:51.882 You, you, very few places in the country is that an issue. 00:09:52.322 --> 00:09:54.002 So, it's not one thing. 00:09:54.877 --> 00:09:56.827 Peter Cook: Let me ask you about something else that's happened in the last year. 00:09:56.957 --> 00:10:00.017 And that is what, what Rob spoke about in his remarks. 00:10:00.087 --> 00:10:03.227 The, the regulatory changes coming from here in Washington. 00:10:03.647 --> 00:10:04.577 A, a long list. 00:10:04.927 --> 00:10:06.627 The Basel Capital Rules. 00:10:06.767 --> 00:10:09.607 We heard about Late Fee proposal. 00:10:09.957 --> 00:10:10.987 Overdraft. 00:10:11.187 --> 00:10:14.197 Reg II on interchange for debit cards. 00:10:14.587 --> 00:10:16.817 Any number of proposals that have come. 00:10:17.077 --> 00:10:19.897 Rob called it the tsunami of regulatory changes. 00:10:20.517 --> 00:10:24.537 As bank leaders, as the CEOs of your institutions, how much of your time right 00:10:24.537 --> 00:10:29.807 now has been devoted to dealing with these issues, planning for these issues? 00:10:30.357 --> 00:10:34.127 Is, is this, just walk me through how you're navigating this right now. 00:10:34.127 --> 00:10:35.617 Julie, maybe I'll start with you on the end. 00:10:36.467 --> 00:10:36.887 Julieann Thurlow: Sure. 00:10:36.927 --> 00:10:42.087 So so it is a tsunami of regulation when you think about 1071 and there there's 00:10:42.087 --> 00:10:45.907 just a tremendous amount of requirements for our institution inside the 00:10:45.907 --> 00:10:49.567 organization, keeping people when, when you actually look at the number of pages, 00:10:49.567 --> 00:10:51.567 I think it was 5, 000 pages in total. 00:10:51.757 --> 00:10:54.477 As far as the amount of regulations we need to sift through and then 00:10:54.477 --> 00:10:56.737 figure out how that actually applies to our institution. 00:10:57.062 --> 00:11:00.232 The new CRA rules are going to fundamentally change the business 00:11:00.232 --> 00:11:03.292 model and how we actually operate, how we actually meet our communities, 00:11:03.312 --> 00:11:06.142 how broad our communities are, and who we now need to serve. 00:11:06.462 --> 00:11:10.072 And so it really makes you rethink how, how we go about the business of banking. 00:11:10.262 --> 00:11:13.552 And that's the reason I think all of us are in the room and are really engaged 00:11:13.552 --> 00:11:16.862 in this conversation right now, because we really need to push back so that 00:11:16.862 --> 00:11:20.602 we actually protect our model and can continue to provide the financial services 00:11:20.812 --> 00:11:22.332 and meet the needs of our community. 00:11:22.972 --> 00:11:25.422 Peter Cook: Is there a particular proposal, and I'll invite this to 00:11:25.422 --> 00:11:28.362 the rest of the panelists, that's, that stands out to you, one that 00:11:28.362 --> 00:11:32.042 causes you the most concern where if you had the ear of regulators, 00:11:32.042 --> 00:11:34.162 you'd love to, for them to hear X. 00:11:34.162 --> 00:11:35.302 John, I see you nodding. 00:11:35.302 --> 00:11:35.732 I'll let you go 00:11:35.732 --> 00:11:36.012 John Asbury: first. 00:11:36.042 --> 00:11:38.522 Well, there, there are challenges with all, if you ask me what I 00:11:38.542 --> 00:11:43.542 think has the potential to have the most unintended consequences 00:11:43.612 --> 00:11:49.412 over time that would CRA reform. 00:11:49.412 --> 00:11:49.442 Okay. 00:11:49.967 --> 00:11:53.067 And I think we would all say that we're in favor of CRA reform. 00:11:53.067 --> 00:11:56.117 There are many aspects of the proposal that I think we as an industry 00:11:56.117 --> 00:11:59.897 support, but there are also some, some unintended consequences that I think 00:11:59.907 --> 00:12:02.167 have not been fully thought through. 00:12:02.487 --> 00:12:04.327 And that's why the industry is pushing back. 00:12:04.327 --> 00:12:08.137 You know, you've got to sort of start with what is it you're trying to accomplish 00:12:08.137 --> 00:12:11.517 from a policy standpoint, what's the outcome and work back from there. 00:12:12.002 --> 00:12:15.802 But when you put out these thousand page documents, it is riddled 00:12:15.802 --> 00:12:17.062 with unintended consequences. 00:12:17.062 --> 00:12:19.792 And I think that's the role of the industry to really hear it, 00:12:19.952 --> 00:12:23.012 have its voice heard as part of what the ABA is doing here. 00:12:23.502 --> 00:12:24.572 The com it's right. 00:12:24.572 --> 00:12:27.022 Comment letters, pay attention to these things. 00:12:27.032 --> 00:12:32.432 I won't get into reg AI right now, but it's very important that we speak up as 00:12:32.432 --> 00:12:37.962 an industry and sort of point out, look, practically, here's what might happen and 00:12:37.962 --> 00:12:39.802 that needs to be taken into consideration. 00:12:41.162 --> 00:12:44.252 Brent Beardall: You know, on to that end, it's a cumulative total. 00:12:44.702 --> 00:12:46.452 It's not any one, each one of them. 00:12:46.452 --> 00:12:47.432 You can poke holes at it. 00:12:47.432 --> 00:12:52.062 And I am so grateful for the ABA for standing up for us collectively. 00:12:52.462 --> 00:12:52.742 Right. 00:12:53.302 --> 00:12:54.362 People talk all the time. 00:12:54.362 --> 00:12:57.842 Why aren't there no more, no, more, no de novo banks. 00:12:57.932 --> 00:12:59.642 Why aren't people coming into the industry? 00:12:59.992 --> 00:13:01.862 Is it because of the regulatory framework? 00:13:02.362 --> 00:13:04.372 I think the fundamental answer is no. 00:13:04.762 --> 00:13:06.472 The profitability in the industry. 00:13:06.612 --> 00:13:08.882 Why would someone want to put their capital into banking? 00:13:09.492 --> 00:13:11.302 You look at the largest banks. 00:13:11.362 --> 00:13:13.772 They're trading at 10 to 12 times earnings. 00:13:14.002 --> 00:13:15.982 What's S& P 500 trading at? 00:13:16.112 --> 00:13:17.702 20 to 25 times earnings? 00:13:18.052 --> 00:13:19.192 Why is that? 00:13:19.422 --> 00:13:22.502 And then we're just layering regulation on regulation on regulation. 00:13:23.082 --> 00:13:25.632 I don't think any of us here on the stage are opposed to 00:13:25.632 --> 00:13:27.192 strong, effective regulation. 00:13:27.262 --> 00:13:29.372 We want good, strong, effective regulation. 00:13:29.857 --> 00:13:32.917 But we also want to be able to compete in the marketplace and deliver a 00:13:32.917 --> 00:13:34.697 reasonable return to our shareholders. 00:13:34.767 --> 00:13:38.387 If we don't have a model that can deliver a reasonable return to shareholders, 00:13:38.427 --> 00:13:41.327 you're not going to have capital coming into the industry, and then 00:13:41.337 --> 00:13:44.337 we're going to have a consolidation of the number of banks, which I think, 00:13:44.947 --> 00:13:46.577 On the long term is bad for banking. 00:13:46.587 --> 00:13:47.477 John Asbury: Yeah, Brent's right. 00:13:47.477 --> 00:13:48.957 I mean, they're gonna be fewer of us. 00:13:48.967 --> 00:13:51.897 And if you erode the structural profitability of the industry, an 00:13:51.897 --> 00:13:57.197 industry which by most studies, consumers would say does a pretty good job that 00:13:57.207 --> 00:14:01.977 we offer free checking, we offer a Bank On certified product as well. 00:14:02.007 --> 00:14:05.417 But if you undermine the structural profitability of the industry, how 00:14:05.417 --> 00:14:06.727 are we supposed to deliver that? 00:14:07.377 --> 00:14:10.747 So I think that it's going to drive more consolidation and it's going 00:14:10.747 --> 00:14:14.057 to limit the ability of the industry to continue to invest in technology. 00:14:14.057 --> 00:14:16.887 And so again, you have to think about unintended consequences. 00:14:16.937 --> 00:14:18.887 It is the cumulative effect of all of this. 00:14:18.937 --> 00:14:20.317 Kenneth Kelly: Well, I'm going to say a couple of things. 00:14:20.317 --> 00:14:23.427 One is that the regulation is good. 00:14:23.437 --> 00:14:29.147 That is because it has had the effect of keeping out some who have a lot 00:14:29.147 --> 00:14:31.457 of money who don't have good intent. 00:14:32.237 --> 00:14:33.527 And we need to be mindful of that. 00:14:33.527 --> 00:14:37.587 So regulation has played a positive role in this whole process. 00:14:37.587 --> 00:14:40.857 And I've seen that firsthand and I won't call any names there. 00:14:40.857 --> 00:14:45.407 But what I would also say is to what Brent said, which is it's about capital. 00:14:45.407 --> 00:14:48.047 I talked about oxygen in a capitalistic society. 00:14:48.707 --> 00:14:54.389 If we want banking to be a core component of the capitalistic society here in the U. 00:14:54.389 --> 00:14:57.277 S., we've got to attract human capital and talent. 00:14:57.737 --> 00:15:01.177 And that's why I'm very proud of what we do at ABA, even the emerging leaders. 00:15:01.177 --> 00:15:04.617 I was in a class or in a room with them yesterday, and I'd like all the emerging 00:15:04.627 --> 00:15:08.327 leaders stand while I'm still talking just so you can see the impact of the 00:15:08.327 --> 00:15:10.607 new leaders that are coming into banking. 00:15:12.907 --> 00:15:17.567 Sitting on this stage at some point in time, leading this industry. 00:15:18.362 --> 00:15:22.942 And it's important that we have emerging leaders because we will 00:15:22.942 --> 00:15:26.392 not be sitting here very long is the best way I can describe that, Peter. 00:15:26.392 --> 00:15:31.022 And so as we think about regulation, I will tell you, we go back to Nashville. 00:15:31.062 --> 00:15:33.772 You and I believe, or Rob may have been on the stage. 00:15:33.772 --> 00:15:35.282 We talked about Basel III. 00:15:35.702 --> 00:15:40.992 And while that doesn't affect me for my size bank at 600 million today, I do 00:15:40.992 --> 00:15:43.032 believe it will have the impact on us. 00:15:43.032 --> 00:15:45.702 And so as vice chair Barr left the stage. 00:15:46.117 --> 00:15:50.127 We talked about there is a need to understand the impact of that. 00:15:50.147 --> 00:15:54.507 What I am grateful in saying is that Chairman Powell did say that they're 00:15:54.507 --> 00:15:56.057 going to pause a little bit on this. 00:15:56.057 --> 00:15:58.757 And so the point I'm making is and want to make to this audience 00:15:58.757 --> 00:16:01.317 is our voices are being heard. 00:16:01.487 --> 00:16:04.157 Be sure you're doing what John just talked about. 00:16:04.337 --> 00:16:07.607 Being sure your voice is heard from Main Street where you are, whether 00:16:07.607 --> 00:16:11.777 that is in Mississippi, Alaska, Vermont, California, Arizona. 00:16:11.987 --> 00:16:15.012 We need all our voices cohesively. 00:16:15.262 --> 00:16:17.332 Or shall I say, rolling the boat together? 00:16:17.792 --> 00:16:19.622 In a manner that is in unison. 00:16:19.622 --> 00:16:23.202 So when we walk over on the hill, or if we had the regulatory agencies, 00:16:23.202 --> 00:16:24.952 they are hearing the exact. 00:16:25.112 --> 00:16:26.452 Same message. 00:16:27.502 --> 00:16:28.642 Julieann Thurlow: Going back to Brent's comment. 00:16:28.652 --> 00:16:30.652 It really is the cumulative impact. 00:16:30.652 --> 00:16:34.812 When you think about higher capital requirements, lower fee income, 00:16:34.842 --> 00:16:38.832 because traditional fees that we've charged for years are now under attack. 00:16:38.832 --> 00:16:39.972 They're no longer lawful. 00:16:40.522 --> 00:16:41.502 Or abusive. 00:16:41.742 --> 00:16:42.172 And 00:16:42.242 --> 00:16:45.362 Julieann Thurlow: and at the same time you're spending more to implements 00:16:45.742 --> 00:16:50.022 software and technology that's necessary to track 1071, and and interchange 00:16:50.022 --> 00:16:51.312 revenue is also under attack. 00:16:51.322 --> 00:16:53.572 So it's coming from all different directions. 00:16:53.572 --> 00:16:56.612 It's not just one regulatory agency that's writing a bunch of rules. 00:16:56.662 --> 00:16:58.772 Julieann Thurlow: It's a bunch of agencies writing a bunch of 00:16:58.772 --> 00:17:00.622 rules, and it's not coordinated. 00:17:00.622 --> 00:17:04.462 So it's coming at us all and it really does make bankers wonder whether or 00:17:04.462 --> 00:17:06.002 not they have a profitable future. 00:17:06.002 --> 00:17:08.282 Evan Sparks: Evan sparks here again, I want to take a quick moment to 00:17:08.282 --> 00:17:09.992 thank our sponsor for this episode. 00:17:10.322 --> 00:17:14.222 This podcast is brought to you by R&T Deposit Solutions, a leading provider 00:17:14.222 --> 00:17:18.662 of cash sweep, balance sheet management and deposit funding solutions founded 00:17:18.662 --> 00:17:23.042 in 1974 R&T leverage his deep industry knowledge and a tech enabled platform 00:17:23.042 --> 00:17:27.092 to provide financial institutions with flexible cash management solutions, 00:17:27.122 --> 00:17:29.912 including access to millions of dollars in reciprocal deposits. 00:17:30.302 --> 00:17:33.822 Visit their website for more information at rnt.com. 00:17:33.842 --> 00:17:39.392 That's the letters R N T .com and thanks again to R&T Deposit Solutions 00:17:39.422 --> 00:17:40.712 for sponsoring this episode. 00:17:41.162 --> 00:17:42.902 And now back to the conversation with Peter. 00:17:44.612 --> 00:17:46.252 Peter Cook: Julie, let me follow up on one point there. 00:17:46.252 --> 00:17:48.452 Something that I know you've been I'm particularly passionate about, 00:17:48.462 --> 00:17:50.812 and you talked about it at your own bank, financial inclusion. 00:17:51.212 --> 00:17:55.552 You've moved into, to neighborhoods in, in your marketplace to try and 00:17:55.552 --> 00:17:57.182 reach as many people as possible. 00:17:57.642 --> 00:18:01.222 The way you can do that is because you generate revenue in other places that 00:18:01.232 --> 00:18:03.582 allow you to, to, to pay for that. 00:18:03.582 --> 00:18:05.602 Can you talk a little bit more about that and the effect of 00:18:05.602 --> 00:18:09.812 something like Reg II the debit interchange cut that's been proposed? 00:18:09.812 --> 00:18:09.827 Julieann Thurlow: Okay. 00:18:10.447 --> 00:18:14.287 So just about everybody in this country has a free checking account. 00:18:14.537 --> 00:18:15.097 Guess what? 00:18:15.317 --> 00:18:16.597 Checking accounts are not free. 00:18:17.052 --> 00:18:19.102 They it costs for us to generate statements. 00:18:19.102 --> 00:18:21.112 It costs for us to maintain them on our system. 00:18:21.302 --> 00:18:24.742 It costs for every single transaction that processes through that checking account. 00:18:25.032 --> 00:18:27.152 And we pay for that through interchange revenue. 00:18:27.332 --> 00:18:31.342 And or other fees for other services that we offer within our institution. 00:18:31.592 --> 00:18:33.852 We're trying to get people into the banking system. 00:18:33.852 --> 00:18:36.072 We now cash checks for non customers. 00:18:36.362 --> 00:18:38.802 We also pay their bills for cash payments. 00:18:39.152 --> 00:18:42.552 So we're developing other products to bring people into the banking 00:18:42.552 --> 00:18:46.882 system and using the free checking account as an opportunity to broaden 00:18:46.882 --> 00:18:48.952 people's access to financial services. 00:18:49.312 --> 00:18:53.172 CRA, as a regulation, has as its goal home ownership, but there 00:18:53.172 --> 00:18:55.532 are a lot of financial steps that consumers need to take. 00:18:55.542 --> 00:18:58.142 First of all, they need to be in a bank and they need to be bankable, 00:18:58.142 --> 00:19:01.412 and they need to learn how to use financial products to improve their life. 00:19:01.657 --> 00:19:05.647 So there's this large continuum that is now being made unprofitable business 00:19:05.647 --> 00:19:09.217 for us and it's going to make it very hard for people to actually access 00:19:09.317 --> 00:19:10.097 the products in our institution. 00:19:10.697 --> 00:19:13.307 Peter Cook: Brent, I want to give you the chance to talk about one 00:19:13.307 --> 00:19:16.287 other item that may be flying a little bit lower on the radar screen. 00:19:16.287 --> 00:19:17.737 You mentioned it to me backstage. 00:19:18.367 --> 00:19:20.497 Governance and a proposal at the F. 00:19:20.497 --> 00:19:20.697 D. 00:19:20.697 --> 00:19:20.847 I. 00:19:20.877 --> 00:19:21.077 C. 00:19:21.077 --> 00:19:22.227 That this has caught your attention. 00:19:22.437 --> 00:19:24.037 Brent Beardall: You know, it sure has. 00:19:24.067 --> 00:19:27.887 And if you look at the comments letter comment letters about the F. 00:19:27.887 --> 00:19:28.067 D. 00:19:28.067 --> 00:19:28.167 I. 00:19:28.167 --> 00:19:28.597 C. 00:19:28.607 --> 00:19:33.837 Governance proposal, it is unbelievably strong against I think governance is, 00:19:34.427 --> 00:19:35.747 who doesn't believe in governance? 00:19:35.957 --> 00:19:39.707 To me, this proposal is the wolf dressed in sheep's clothing 00:19:39.707 --> 00:19:41.007 because it's governance. 00:19:41.007 --> 00:19:42.257 We all want strong governance. 00:19:42.407 --> 00:19:43.797 Strong governance is a good thing. 00:19:44.057 --> 00:19:47.517 What that looks like, the devil is in the details, and there are 00:19:47.517 --> 00:19:48.837 so many things in that proposal. 00:19:48.847 --> 00:19:53.477 The one that really strikes me is that if you have a holding company and a 00:19:53.477 --> 00:19:57.277 bank, you could potentially have to have two entirely separate boards. 00:19:57.622 --> 00:20:01.142 I think the vast majority of holding company boards and the bank boards 00:20:01.152 --> 00:20:03.432 are the similar, the same individuals. 00:20:03.502 --> 00:20:06.492 And you could, because of conflict of interest, because it would no 00:20:06.492 --> 00:20:09.952 longer be independent based on this new governance standard proposal. 00:20:10.792 --> 00:20:11.802 Imagine that. 00:20:12.002 --> 00:20:15.112 Imagine trying to recruit directors. 00:20:15.212 --> 00:20:18.962 The line is already blurring between what is the role and responsibility 00:20:19.042 --> 00:20:22.012 of management and the role and responsibility of the board of directors. 00:20:22.397 --> 00:20:25.057 In my mind, it's very clear the board is for oversight. 00:20:25.237 --> 00:20:27.967 Management is for setting strategy and execution. 00:20:28.247 --> 00:20:29.457 And then the board can bring them in. 00:20:29.717 --> 00:20:31.477 And those lines are blurring. 00:20:31.477 --> 00:20:32.377 We're getting it all the time. 00:20:32.377 --> 00:20:33.747 I don't know about other institutions. 00:20:33.857 --> 00:20:36.667 Our regulators want regular meetings with our board members. 00:20:36.922 --> 00:20:37.522 What do they know? 00:20:37.522 --> 00:20:41.452 And pretty soon the board needs to be literally a part of management. 00:20:41.452 --> 00:20:43.932 So I think we need to strengthen those lines. 00:20:44.182 --> 00:20:46.062 I thought it was very, very insightful. 00:20:46.102 --> 00:20:50.852 The Council of State Regulators, they put out a letter in opposition. 00:20:51.062 --> 00:20:53.082 They were so strong to the FDIC proposal. 00:20:53.082 --> 00:20:55.712 I think they said, don't try to tweak this proposal, just 00:20:55.742 --> 00:20:57.012 withdraw it in its entirety. 00:20:58.022 --> 00:21:01.612 Peter Cook: All right, I'm gonna shift in our time remaining to not 00:21:01.612 --> 00:21:04.922 regulation, not even the current state of business, but the future. 00:21:05.852 --> 00:21:09.162 Tell me about your bank right now, what you're investing 00:21:09.162 --> 00:21:10.962 in, what you're excited about. 00:21:11.302 --> 00:21:14.132 And John, I'll begin with you as you, you just completed a 00:21:14.212 --> 00:21:15.792 merger in the process right now. 00:21:16.297 --> 00:21:19.197 As you look at, even with the regulatory challenges you're facing, 00:21:19.197 --> 00:21:22.347 some of the economic challenges, what, what, what has you excited 00:21:22.347 --> 00:21:23.407 each day when you go into the office? 00:21:23.417 --> 00:21:24.477 John Asbury: Well, I am super excited. 00:21:24.707 --> 00:21:28.347 It was, it's really we're investing in people and technology, and what has me 00:21:28.347 --> 00:21:31.747 excited is despite all the noise, all the distraction, all the challenges, 00:21:31.747 --> 00:21:35.127 at the end of the day, we're, we're like almost all of us in this room. 00:21:35.127 --> 00:21:36.717 We're a real bank for real people. 00:21:37.502 --> 00:21:40.132 And we help people and we help communities. 00:21:40.132 --> 00:21:43.352 We provide services, we provide financing that's beneficial. 00:21:43.892 --> 00:21:47.562 And I think it's, it's fundamentally a noble profession. 00:21:47.622 --> 00:21:50.702 I do not understand why we are in the crosshairs for kind of 00:21:50.702 --> 00:21:53.662 all of the political debate and we're being targeted, et cetera. 00:21:54.132 --> 00:21:56.432 But, but at the end of the day, we do a lot of good. 00:21:56.462 --> 00:21:57.482 I see it every day. 00:21:57.482 --> 00:22:00.992 The number of clients, people who come up to me saying, I love your bank. 00:22:01.262 --> 00:22:02.322 You do a great job. 00:22:02.642 --> 00:22:03.192 The people. 00:22:04.027 --> 00:22:05.817 It's really all about the people and the end. 00:22:05.817 --> 00:22:08.787 No matter the challenge, no matter what it is, it's all about the people. 00:22:08.837 --> 00:22:11.467 And so the merger with American nationals is kind of the 00:22:11.467 --> 00:22:13.147 latest, greatest exciting thing. 00:22:13.167 --> 00:22:15.637 So that's what it's people business. 00:22:15.637 --> 00:22:16.387 We help people. 00:22:16.517 --> 00:22:18.147 We fundamentally do a lot of good. 00:22:18.147 --> 00:22:21.062 I hope people will remember that that don't really understand this industry. 00:22:21.882 --> 00:22:23.872 Peter Cook: Kenneth, let me ask you, what are you excited about? 00:22:23.872 --> 00:22:24.222 Kenneth Kelly: Sure. 00:22:24.282 --> 00:22:25.612 I'm excited about the future. 00:22:25.612 --> 00:22:28.962 And it's the two topics that John just talked about, which is the 00:22:28.962 --> 00:22:32.742 people, human capital aspect of it, and the technology side of it. 00:22:32.742 --> 00:22:36.242 In fact, I share with our board, we've been doing this now for six 00:22:36.242 --> 00:22:40.792 plus years that we have to act and behave like a technology company 00:22:40.942 --> 00:22:42.882 in the logistics of moving money. 00:22:43.242 --> 00:22:44.662 That's a mantra at our board. 00:22:44.662 --> 00:22:46.392 It's a mantra across our business. 00:22:46.392 --> 00:22:50.722 And so having said that, we've gone to a completely digital core system. 00:22:51.052 --> 00:22:53.342 We changed that in the midst of actually COVID. 00:22:53.352 --> 00:22:54.452 We got that done. 00:22:54.712 --> 00:22:59.242 I would say on time, not quite on the budget because the fees to unhook 00:22:59.252 --> 00:23:00.922 was a lot more than we budgeted. 00:23:01.242 --> 00:23:03.502 And I hope most of you can appreciate that joke. 00:23:03.782 --> 00:23:08.562 But when you look at the people side of it, Peter, I mean, I talked about 00:23:08.562 --> 00:23:09.832 the emerging leaders just a moment ago. 00:23:09.832 --> 00:23:12.472 We have one here, Helda Saad, who's on our team. 00:23:12.962 --> 00:23:17.802 We actually about five, right at five years ago, stood up a, a At 00:23:17.822 --> 00:23:22.142 that time, I'm going to name it as it was, the Millennial Advisory Board. 00:23:22.752 --> 00:23:27.172 And the intent was, as I looked at the demographics of our customers, we 00:23:27.172 --> 00:23:29.952 were on the mature side, shall I say. 00:23:30.372 --> 00:23:32.962 And we wanted to be attractive to a younger base. 00:23:32.962 --> 00:23:37.242 And so we brought in a board of young entrepreneurs, et cetera, who would 00:23:37.252 --> 00:23:41.922 give us feedback while we also gave them leadership development opportunities and 00:23:41.922 --> 00:23:43.452 the opportunity to learn about banking. 00:23:44.137 --> 00:23:48.687 And so I would tell you, if you look at the history of those team members, many of 00:23:48.687 --> 00:23:52.857 them have participated in what you would call shark tanks in our Metro Detroit 00:23:52.857 --> 00:23:55.637 area and won or been placed in those. 00:23:55.917 --> 00:23:58.957 And so we're very proud of that, but that's also the ethos we're trying 00:23:58.957 --> 00:24:01.167 to bring into our, into the bank. 00:24:01.187 --> 00:24:04.787 So we're very proud about the people opportunity because we're going to need 00:24:04.797 --> 00:24:08.277 human capital to come and sit on this stage five years from now, 10 years 00:24:08.277 --> 00:24:12.782 from now, but also technology and being sure we're competitive with any other 00:24:13.052 --> 00:24:16.802 person or entity out there who wants to play in the financial services space. 00:24:17.757 --> 00:24:18.137 Peter Cook: Julie, 00:24:19.167 --> 00:24:21.677 Julieann Thurlow: I think I'll just echo what Kenneth was saying is 00:24:21.717 --> 00:24:25.187 innovation has a lot of there's a lot of opportunity for us to become 00:24:25.187 --> 00:24:29.037 more efficient as institutions to deliver products and services easier. 00:24:29.047 --> 00:24:29.477 Better. 00:24:29.857 --> 00:24:33.167 We are going to have to dismantle a lot of the things that have been built up in the 00:24:33.167 --> 00:24:38.797 past as far as our operational processes so that we can deliver better on behalf 00:24:38.797 --> 00:24:44.417 of our consumers and and customers, but it is the people and the emerging leader 00:24:44.677 --> 00:24:46.537 program here at ABA has brought in. 00:24:46.927 --> 00:24:51.397 Such rich talent so that we really have an optimism about about 00:24:51.427 --> 00:24:52.837 the future for our industry. 00:24:53.037 --> 00:24:56.997 People that really are passionate about their communities and doing well in the 00:24:57.007 --> 00:24:59.177 banking space, but doing well for others. 00:24:59.587 --> 00:25:00.557 Peter Cook: Yeah, right. 00:25:00.567 --> 00:25:04.437 I know we talked about resiliency for the industry over the past year. 00:25:04.447 --> 00:25:08.227 You've got a personal story of resiliency, and I know it's a message you shared 00:25:08.227 --> 00:25:10.307 with some of those emerging leaders. 00:25:10.657 --> 00:25:13.617 What's your outlook for the future, given what you've been 00:25:13.617 --> 00:25:14.767 through over the last year or so? 00:25:15.332 --> 00:25:18.422 Brent Beardall: Yeah, . I, I could, I could go on for a while. 00:25:18.472 --> 00:25:20.422 Peter Cook: And, and not everyone of course knows your story, so. 00:25:20.422 --> 00:25:20.662 Yeah. 00:25:20.712 --> 00:25:23.237 Brent Beardall: So for those of you that don't know about 14 months 00:25:23.237 --> 00:25:24.797 ago I was in a plane accident. 00:25:24.857 --> 00:25:29.837 The plane that went down and the person sitting from me to John passed on Impact, 00:25:29.897 --> 00:25:35.207 and I, I was left with not a bright outlook, and I'm here and before you. 00:25:35.207 --> 00:25:36.047 I'm so grateful. 00:25:36.467 --> 00:25:38.027 I am the luckiest guy in the world. 00:25:38.057 --> 00:25:39.492 I'm happy to have that debate with anyone. 00:25:40.002 --> 00:25:44.262 I'd said that before the plane accident because I do feel lucky 00:25:44.592 --> 00:25:48.712 because of what I get to do every day and who I get to do it with. 00:25:48.972 --> 00:25:51.002 I look at this stage, look at the people I'm surrounded 00:25:51.002 --> 00:25:53.122 with and they make me better. 00:25:53.162 --> 00:25:54.542 So, so thank you very much. 00:25:54.542 --> 00:25:59.032 But, you know, resiliency 00:26:02.112 --> 00:26:02.812 is a choice. 00:26:03.282 --> 00:26:04.522 It's a choice for each of us. 00:26:05.117 --> 00:26:06.227 Stuff is going to happen. 00:26:06.967 --> 00:26:08.367 How are we going to overcome it? 00:26:08.847 --> 00:26:13.017 And that's what I love about the banking industry in the United States, right? 00:26:13.057 --> 00:26:16.617 I mean, in a lot of instances, it's David versus Goliath. 00:26:16.967 --> 00:26:17.227 Right? 00:26:17.247 --> 00:26:20.777 It's we're big enough to be relevant, small enough to be 00:26:20.777 --> 00:26:22.567 nimble, and let's figure it out. 00:26:22.757 --> 00:26:24.927 And to me, that, that is resiliency. 00:26:25.227 --> 00:26:27.837 And, you know, back to the previous question, what, what 00:26:27.837 --> 00:26:30.417 excites me It's the passion. 00:26:30.417 --> 00:26:32.567 It's the caring that the teams have. 00:26:32.837 --> 00:26:34.987 Why do we do what we do? 00:26:35.297 --> 00:26:37.087 Because we want to create a better future. 00:26:37.337 --> 00:26:39.197 We want to create a better future for our clients. 00:26:39.197 --> 00:26:41.687 We want to create a better future for our employees, our teams. 00:26:42.467 --> 00:26:45.437 I'm a big believer you can't just sit back there and throw stones and 00:26:45.437 --> 00:26:46.877 pick apart everything that's wrong. 00:26:47.177 --> 00:26:48.957 We could talk all day long about what's wrong. 00:26:49.717 --> 00:26:52.047 The question as leaders is what are we going to do about it? 00:26:52.817 --> 00:26:53.747 How are we stepping up? 00:26:53.747 --> 00:26:56.587 How are we personally, and how is our organization going to make a difference? 00:26:57.087 --> 00:27:01.347 And that's what has me really excited and to me that's resiliency is preparing. 00:27:01.427 --> 00:27:05.397 Okay, we think we know what's going to happen But you know what we're sure 00:27:05.397 --> 00:27:08.887 of is we're going to be wrong And so how are we going to adapt to that? 00:27:09.757 --> 00:27:13.447 Peter Cook: We've got 1200 bankers here in washington in person. 00:27:13.447 --> 00:27:17.407 We've got a whole host watching in the live stream what's your message 00:27:17.407 --> 00:27:20.847 to them both the folks in the room here and the folks at home about? 00:27:21.232 --> 00:27:24.942 Advocacy and getting involved and and I'll end with our chair 00:27:24.942 --> 00:27:26.072 and I'll begin here with John. 00:27:26.072 --> 00:27:26.802 We'll go down the line. 00:27:27.322 --> 00:27:30.062 John Asbury: I think the message is, is simply, you know, people need to get 00:27:30.062 --> 00:27:32.372 engaged and don't just be a bystander. 00:27:32.692 --> 00:27:39.182 So whatever matters to you, do something to try to accomplish a, a better outcome. 00:27:39.272 --> 00:27:42.312 And to your point, Brent, don't just, don't just criticize. 00:27:42.372 --> 00:27:43.062 That's easy. 00:27:43.062 --> 00:27:43.752 That's weak. 00:27:44.332 --> 00:27:47.322 Leadership is really about taking a stand. 00:27:47.352 --> 00:27:50.842 You also need to be empathetic and try to understand the perspective of others. 00:27:50.842 --> 00:27:52.492 We could complain about regulations. 00:27:52.492 --> 00:27:54.952 Part of why I try to understand what is the perspective of our, 00:27:55.212 --> 00:27:58.072 some of these regulations that are coming at us, you know, what is it 00:27:58.072 --> 00:27:59.442 that we're trying to accomplish? 00:27:59.442 --> 00:28:01.482 So get engaged, pay attention. 00:28:01.482 --> 00:28:02.502 Don't just be a bystander. 00:28:03.552 --> 00:28:05.262 Brent Beardall: I would say be authentic. 00:28:07.527 --> 00:28:10.407 Live your values and then tell the story. 00:28:10.917 --> 00:28:12.217 Never go with just numbers. 00:28:12.247 --> 00:28:14.737 Nobody, numbers aren't going to save anything. 00:28:15.267 --> 00:28:16.007 Tell your story. 00:28:16.017 --> 00:28:16.787 Be engaged. 00:28:16.787 --> 00:28:18.357 Make a difference in your communities. 00:28:18.387 --> 00:28:20.737 Understand how your bankers are making a difference. 00:28:20.837 --> 00:28:22.057 Then tell the story. 00:28:22.357 --> 00:28:24.017 We have a great story to tell. 00:28:25.247 --> 00:28:28.267 And kind of by our nature, as bankers, we're humble. 00:28:28.577 --> 00:28:29.637 We want to take a back seat. 00:28:29.717 --> 00:28:31.387 We want to let others have the spotlight. 00:28:31.397 --> 00:28:32.217 That's where we're comfortable. 00:28:33.252 --> 00:28:35.662 Ladies and gentlemen, I'm telling you, we have to step forward. 00:28:35.662 --> 00:28:36.762 We have to go in the stoplight. 00:28:36.762 --> 00:28:37.562 We spotlight. 00:28:37.562 --> 00:28:41.112 We have to tell our story because if we don't tell our story in the 00:28:41.122 --> 00:28:44.092 absence of us, in the vacuum of us telling the story, you're going 00:28:44.092 --> 00:28:46.822 to have all these chicken littles telling everybody how bad things are. 00:28:47.552 --> 00:28:48.502 That's not the case. 00:28:48.512 --> 00:28:50.912 It is our responsibility. 00:28:50.952 --> 00:28:53.462 Our obligation is leaders to tell the story. 00:28:53.717 --> 00:28:57.877 And a story, not just numbers, not just, Hey, you know, 87 percent 00:28:57.877 --> 00:28:58.937 of the people think that's great. 00:28:58.957 --> 00:28:59.517 Those are good. 00:28:59.517 --> 00:29:03.147 I appreciate those stats to have those in our back pocket, but we need to talk 00:29:03.157 --> 00:29:07.217 about what are we doing to help the lives of the people in our communities? 00:29:08.257 --> 00:29:08.717 Peter Cook: Kenneth? 00:29:08.847 --> 00:29:11.607 Kenneth Kelly: Yes, Peter, I'll have to go back to finish my story. 00:29:11.607 --> 00:29:16.777 I said, and talked about the millennial advisory board. 00:29:17.067 --> 00:29:18.467 They came to me and said, Mr. 00:29:18.467 --> 00:29:20.047 Kelly, we want to rename ourselves. 00:29:20.077 --> 00:29:22.467 The word millennial now has a dirty connotation. 00:29:23.802 --> 00:29:27.402 So we, they renamed themselves actually the Next Gen Board. 00:29:27.692 --> 00:29:30.352 And the reason I bring that up is going to your point, Brent. 00:29:30.382 --> 00:29:34.252 As leaders, sometimes we have to listen with the two ears versus 00:29:34.272 --> 00:29:35.962 talk, sometimes with the one mouth. 00:29:36.302 --> 00:29:40.792 And taking the message going forward as we talk about banking, meaning 00:29:40.792 --> 00:29:44.762 we really have to take a stand and look at how do we have a positive 00:29:44.802 --> 00:29:47.312 impact on the current situations. 00:29:47.312 --> 00:29:50.242 We talked about all the regulatory issues that are taking place. 00:29:50.662 --> 00:29:54.082 But united as a front, we can certainly row the boat together on this topic. 00:29:55.527 --> 00:29:55.877 Peter Cook: Julie, 00:29:56.357 --> 00:29:58.647 Julieann Thurlow: I'll just reiterate what's been said here. 00:29:58.837 --> 00:29:59.857 We're here in D. 00:29:59.857 --> 00:30:00.307 C. 00:30:00.497 --> 00:30:05.457 And and we're coming from all of our districts and we're we're here to bring 00:30:05.467 --> 00:30:08.977 the message of what the experience is for our consumers on the ground, for 00:30:08.977 --> 00:30:13.277 our customers, for what we're doing for our industry in our community. 00:30:13.477 --> 00:30:15.197 We're actually where the rubber meets the road. 00:30:15.537 --> 00:30:18.967 And getting that message here and talking about what the regulations 00:30:18.997 --> 00:30:20.857 impact is on that consumer. 00:30:21.057 --> 00:30:26.277 How they're going to experience that 1071 asking 80 questions of a new applicant. 00:30:26.337 --> 00:30:28.967 How is that going to make it easier for someone to start their business? 00:30:29.282 --> 00:30:32.592 For someone to buy a home and do all the things that we 00:30:32.592 --> 00:30:34.732 actually as an industry support. 00:30:34.742 --> 00:30:38.012 So again, telling our story and making sure that we're connecting 00:30:38.012 --> 00:30:41.152 with people here so that they see what their work here in D. 00:30:41.152 --> 00:30:41.562 C. 00:30:41.732 --> 00:30:43.552 does to the experience at home. 00:30:44.142 --> 00:30:46.202 Peter Cook: We've got just a minute or so left here. 00:30:46.202 --> 00:30:48.702 I'm gonna surprise you guys with one last question because I always 00:30:48.702 --> 00:30:49.872 like asking this to bankers. 00:30:50.382 --> 00:30:51.022 Tell me a story. 00:30:51.022 --> 00:30:55.502 I don't need a name, but a customer, an individual or a business customer that 00:30:55.502 --> 00:31:00.562 you, your institution touched in some way this year that made a difference. 00:31:01.092 --> 00:31:05.182 A personal story that you shared in the office or you heard in the office that 00:31:05.182 --> 00:31:06.332 made you feel good about what you do. 00:31:07.212 --> 00:31:08.752 And I'm letting you all think. 00:31:08.822 --> 00:31:11.262 Julie, I'm going to start with you this time and see if you've got one. 00:31:11.872 --> 00:31:15.132 Julieann Thurlow: Sure, there was a a developer ended up buying a buying a 00:31:15.142 --> 00:31:19.802 building in a city that hadn't had a new building constructed in over 60 years. 00:31:20.072 --> 00:31:24.532 It is now market rate units that are sold out all to low 00:31:24.532 --> 00:31:25.812 to moderate income individuals. 00:31:25.862 --> 00:31:31.332 And it's robust and the valuation when it was imagined was at 7 million and 00:31:31.332 --> 00:31:33.462 then now the valuation is at 12 million. 00:31:33.502 --> 00:31:37.182 So creating equity and putting it in people's pocket, that's what we do. 00:31:37.782 --> 00:31:38.082 Kenneth Kelly: Great. 00:31:38.252 --> 00:31:41.642 We've got a customer in Minneapolis who's in the Mall of America. 00:31:41.642 --> 00:31:43.282 It's just outside of Nordstrom's. 00:31:43.632 --> 00:31:47.632 He actually got burned out on Lake Street as part of the unrest 00:31:47.632 --> 00:31:49.832 associated with George Floyd's murder. 00:31:50.277 --> 00:31:53.037 And had to sell clothing out of the trunk of his car. 00:31:53.037 --> 00:31:56.737 And so we recently did some work with him, got a loan for him, and 00:31:56.737 --> 00:31:59.727 he's now open and running shop there inside of the Mall of America. 00:31:59.727 --> 00:32:02.597 So if you get a chance to go to Minneapolis Twin Cities, go 00:32:02.597 --> 00:32:03.867 by and visit and buy something. 00:32:04.747 --> 00:32:04.987 Peter Cook: Great. 00:32:05.237 --> 00:32:05.547 Brent? 00:32:05.747 --> 00:32:07.987 Brent Beardall: It's a customer, just a consumer customer. 00:32:07.987 --> 00:32:10.167 I think they have 1, 200 in their checking account. 00:32:10.207 --> 00:32:12.267 They had some fraud that occurred on their account. 00:32:12.717 --> 00:32:16.447 They reached out to us and the same day they reached out to us, we said, 00:32:16.727 --> 00:32:18.627 We're sorry this has happened to you. 00:32:18.627 --> 00:32:20.317 It, you know, fraud is prevalent everywhere. 00:32:20.597 --> 00:32:22.347 Here's all the money back into your account. 00:32:22.347 --> 00:32:22.937 Same day. 00:32:23.217 --> 00:32:23.957 We'll investigate it. 00:32:23.957 --> 00:32:24.877 We'll take care of it. 00:32:25.527 --> 00:32:26.417 She reached out to me. 00:32:26.417 --> 00:32:26.917 She wrote a letter. 00:32:26.917 --> 00:32:31.647 She's like Brent never in my life have I felt like my bank has had my back. 00:32:33.067 --> 00:32:34.207 That's what we're about. 00:32:35.577 --> 00:32:37.887 Why not give our customers the benefit of the doubt? 00:32:38.147 --> 00:32:38.487 Sure. 00:32:38.487 --> 00:32:41.337 There's bad actors that will take advantage of those are the minority. 00:32:41.487 --> 00:32:43.027 The majority are people like this. 00:32:43.027 --> 00:32:43.092 Okay. 00:32:43.332 --> 00:32:45.472 Find woman that said, You know what? 00:32:45.712 --> 00:32:47.312 All I want is somebody that believes in me, 00:32:48.252 --> 00:32:49.252 Peter Cook: John, you get the last word. 00:32:49.412 --> 00:32:52.452 John Asbury: I'm thinking of a not for so many stories, not for profit that 00:32:52.462 --> 00:32:55.862 provides affordable housing, and they reached out in the end and said, We 00:32:55.862 --> 00:32:57.272 couldn't have done this without you. 00:32:57.312 --> 00:33:00.222 It's your team's creativity, devotion. 00:33:00.662 --> 00:33:02.242 You know, thank you for working with us. 00:33:02.242 --> 00:33:04.002 This will make a difference in people's lives. 00:33:04.002 --> 00:33:06.352 You know, to my point, that's what we do. 00:33:06.372 --> 00:33:08.242 This industry does a lot of good. 00:33:08.282 --> 00:33:09.902 People need to stay focused on that. 00:33:11.492 --> 00:33:15.762 Peter Cook: John, Brent, Kenneth, Julie, thank you, the four of you, the 00:33:15.762 --> 00:33:20.759 leadership you provided ABA as well, and for sharing your stories here. 00:33:20.759 --> 00:33:23.399 Evan Sparks: Thanks for listening and thanks again to R&T Deposit 00:33:23.399 --> 00:33:24.989 Solutions for sponsoring this episode. 00:33:25.079 --> 00:33:26.729 We'll be back with you again very soon.