About the Episode

Season 2 Episode 17 of Lending Made Easy tackles an important issue facing community banks and credit unions today - how to take advantage of the talent shakeups happening at bigger banks. As large institutions continue to consolidate and reduce headcount, David Catalano, Bryan Peckinpaugh, and Mitch Woods discuss the major opportunity for smaller institutions.

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Transcript

Mitch Woods: Welcome to the latest episode of Lending Made Easy. I'm joined again today by David Catalano and Bryan Peckinpaugh to share their insights on a hot topic, the talent restructuring of big banks. But we're going to add a little twist to it. We're going to focus on how community banks can really capitalize on the talent floating around out in the marketplace.

So, if you've been watching the news and we've seen some of the larger banks, you know, Citi, Wells, Truist, all announced they've been restructuring and they've had some talent shakeups. So. Bryan, David, I just want to kick off today's episode with a question to either one of you, you know, with these talent shakes ups, what do you think that really means for a community bank or a credit union right now?

Bryan Peckinpaugh: Well, I think very broadly speaking at first blush, you know, we've been in a talent drought for quite a while now, it's been very difficult for organizations to, staff where they need to staff, there, there could be some easing of that if there's new quality talent from those large financial institutions in the market, you also have to wonder, yeah.

You know, are the community banks closing down those hiring spots, due to their own performance so that's something that needs to be considered. but, should open up a door to, you know, those banks that are performing, to grab some talent that wouldn't otherwise have been available, and using that to maybe grow and stretch what they do, or, you know, even double down on areas of focus.

So if I can find a. You know, an RM or an operations person from a large FI that, that was caught up in the restructuring. if they happen to align with markets that I serve with, industries that I look to bank, you know, great. I can kind of jumpstart maybe that area. if they are in areas I've had interest in, but didn't have the knowledge and expertise on, I can use it to, you know, get into that space while others may be slowing.

So a lot of it will be down to the, the performant banks and their ability to capitalize on the available talent.

David Catalano: Oh, good points, Bryan. I think this is a great opportunity for some opportunistic hiring. So if you think about the supply and demand, you've got extra supply and there's probably lower demand even from other community banks due to performance. So if you're in a position where you could talk to people and identify opportunities to hire Quality folks from larger institutions, you know, as long as they're culturally compatible,you're likely to find some gems there.

What I find when someone comes from a larger company and moves into a smaller company is they bring process and accountability, or they can bring process and accountability, depending on the culture of where they're coming from, to the smaller organizations, which sometimes lack that. If the people in those organizations haven't come from a larger, more structured environment and that process and accountability can really enhance performance and improve efficiency.

So if you can find a leader that can come in and take over some area, potentially or the improvements they bring to the organization can be spread, you know, throughout the organization. it's essentially an opportunity to top grade, as well. So, to me, this is a great opportunity and I hope the community banks take advantage of it.

Because it doesn't come around very often. It's been a long time.

Bryan Peckinpaugh: Yeah, it has, right? A lot of things that are happening in our market haven't happened in a long time. and I think it's also an opportunity to look beyond,the traditional banking areas of focus. You know, it could be an opportunity if you're a community bank that's not yet dipped your toe in the waters of technology in certain areas of your financial institution.

You might be able to find some it talent, that's caught up in the restructuring or operational talent focused on, you know, product ownership that could come, you know, in our segment of. loan origination. Maybe you find somebody who has experience working with Baker Hill next gen. You're interested in a, you know, loan origination solution for your institution.

You don't know where to start, having somebody with that experience, with that background, with knowledge of. The technology in the space, you know, can also help you capitalize on what's going on in the market. because you know, with the slowdowns that are forcing some of the restructuring, this can be the best time to look at things like that, because you can afford to take some of the quote unquote line time away from your staff.

You know, whereas in a normal. Environment. they're solely focused on production business. If I can get a couple hours of their time on a daily basis to work on a project, to help me roll something out, so that when the volume does come back, I'm ready for it. I would also look at that kind of talent as a way to prepare you to leapfrog once the economy settles and the demand for the loans come back.

David Catalano: Yeah, that's a really good point, Bryan. The other thing that a larger company sometimes will have is a more robust planning process or strategic planning process or even budgeting process and having somebody with that level of experience that can bring that to the, to a smaller organization is also valuable.

So again, I keep going back to the things that larger companies do really well,and taking those, Best practices and bringing them to a smaller organization that maybe doesn't have all of that rigor around process and accountability. I think it's a tremendous opportunity. When we had, you know, inside, inside our organization, we needed to, scale.

We were growing rapidly and we needed to scale our implementation, product management development team, and hired an executive from a much larger company. And, you know, the changes he's put into place in a fairly short time are just awesome, you know, wonderful. It's all around process and accountability and it allows you to scale an organization much more quickly.

And know where, you know, what everyone's doing at all, all time towards, you know, moving down the field towards the goal. So again, you don't get that. On your own, you have to learn it from somewhere and you find that in larger organizations,

Bryan Peckinpaugh: Yeah. Like you said, David, it can be an opportunity to not have to learn through trial and error. You can find the people that have learned it and leverage those learnings. I'll. Play devil's advocate for a moment and talk about the flip side. I wouldn't just go higher talent to higher talent.

I think there still needs to be a recognition, depending on who you are as a financial institution, let's say you're a 750 million. community bank, and we're talking about talent being run off from, in some instances, trillion dollar banks, and those may not in any way, shape, or form be relevant to the banking that you do, right?

Even if they're bankers in your local market. Even if they are operations people in a financial institution, I would caution folks to not just grab talent for talent's sake, but make sure that the talent aligns, you know, you continue to focus on what has made you successful as a community bank.

So it's a fantastic opportunity, but not without its, without its risks.

David Catalano: Exactly. You know, in, in smaller organizations,we always would, really term ourselves or describe ourselves as blue collar executives. Cause we actually have to do the work, right? There's not a whole lot of people around to do the extra work or the work that you come up with. you actually have to do.

So you just want to make sure you're culturally, the person's culturally compatible with the approach you take in running a business. And if you expect your executives to actually do their own work, you know, make sure this person knows that as well, whatever level they're coming in at.

There's not a whole lot of extra people around to do all the work you can come up with. you actually have to. Have to do that in some organizations are large enough where there's enough staff to cover all of the work created by the person creating the ideas, but in smaller organizations that really doesn't exist or in, highly efficient organizations.

You gotta be careful what you ask for.

Mitch Woods: You know, what you guys are talking about is making me really think about, you know, Warren Buffett's famous saying, right? when people are nervous, be greedy. When people are greedy, be nervous. You know, people, to both of your points, people are an investment in your institution, right? and that doesn't mean, Bryan, to your point, to throw caution to the wind and hire anybody.

But, I think that there's a lot to unpack there, right, is investing in people. But then. What do you think that means, you know, as a community bank or a credit union and investing in your existing people right now as well?

David Catalano: Well, I mean, that doesn't negate that. It's, that's just a, you know, you should be doing that already. you should be identifying where, folks need to grow and help 'em get there. this is, I think,a different animal. This is just an opportunistic, time. That's not gonna happen frequently, and you just need to take advantage of it.

You should always be thinking about how am I gonna grow my people? How, what am I gonna do? Put in place to keep them happy and to keep them growing, so that they feel, challenged as well as fulfilled, in their work. But none of this changes that.

Bryan Peckinpaugh: to get back to your comment of, you know, Scared versus greedy, Mitch and David's earlier comments of the supply and demand concept that there's no question that this is going to be ramping up the supply and at some point the demand is going to have to follow and, if the demand does follow the market, start to come back around, people start to, you know, be lending money again.

Those jobs will become hot commodities and there'll be a lot of people chasing them. there'll be a lot of people knocking on doors, between now and then. you know, hey, think about me, hey, your volumes are going to come back. Mr. Trillion Dollar Bank, you're going to need people.

And in that line will be the people that work for your little community bank, because they will see it, right? They will understand that. those layoffs aren't forever. That restructuring has to come back as the volume comes back. Cause you're, you know, you're seeing that we're laying off due to volume, as soon as that comes back, I've got to rehire, uh, your people will be in those same lines and, you know, you need to be focusing on what you are doing,to make sure you retain them.

If they start to look when those big jobs open up,

David Catalano: Yeah. You're going to have to get these people to fall in love with the community bank, which I don't think is going to be that difficult.

Bryan Peckinpaugh: The apple pie, right? That it's down home banking. It's the historical approach to it. It's the tried and true, in community banking. that's why, uh, you know, a lot of them continue to thrive. Uh, you know, they don't have some of the other problems we've seen from a, capitalization concept, they're good, strong. Basic deposits, funding, their conservative lending strategies, which set them up to, to weather these types of storms. there's a lot to be said for just kind of doing it the right way and, uh, focusing on what are the fundamentals of banking.

David Catalano: Yeah. And I mean, if you think about a smaller organization, if you're the type of person that likes to create, get things done and take action and sit at the tip of the spear of an organization and you're working in a community bank and you have an idea, you can likely get that approved pretty quick versus, you know, trying to change a larger organization.

You know, that, that decision making process is like, you're going to take a bit longer, be a bit more rigorous and be less, less likely to occur. So I just think that the, there's so many benefits to being at a smaller organization, especially if you're the type of person that likes to create, value within the organization and with the opportunities that the, that you can come up with, maybe that the bank's not already in or changes that you want to make the bank better.

So if you're a superstar or. a rising star, let's say that at a larger organization, you can really thrive in a, in an environment where decisions can be made quickly.

Mitch Woods: David, I think that goes back to your point, right? Those hires have to be culturally compatible. you know, you have to find the person that wants the apple pie, right, Bryan?you can't be looking for the person looking Big bank feel you've got to find the right people.

So for me, I'm taking away from this, right? If I'm a community bank right now, I'm in charge of hiring talent. It is an opportunity to really. Scale my business, uh, in a way without taking on a lot of guesswork or a lot of risk with a talent. but it's also a time to be really smart about it as well.

So Bryan, David, thank you guys for sharing some insights today and thanks everybody out there for listening to today's episode of lending made easy.