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Md. bank executives reflect on marketplace

The Daily Record asked four of Maryland’s top bank presidents and CEOs to weigh in on everything from the state of the banking industry in Maryland to their predictions for 2015. Here are their responses.

  • Bertamini
  • Cashen
  • Martin
  • Wilfong
Name: Andrew Bertamini

Title: President, Maryland Region, Wells Fargo

Company: Wells Fargo

Years on the job: 40

Headquarters: San Francisco, California

Number of employees: 265,000

Please share a bit about the history of your bank.

Andrew BertaminiWells Fargo entered Maryland in 1914 on the Baltimore & Ohio Railroad, opening offices in 106 Maryland communities. Wells Fargo traces its Maryland banking heritage back to several prestigious banking institutions, including Bank of Baltimore, founded in 1795, and Savings Bank of Baltimore, established in 1818. Through the years, the bank has operating under different names – most recently operating as Signet Banking Corp., which later became First Union and then Wachovia. Today the legacy of these historic banking institutions continues in Maryland under the name Wells Fargo.

How’s business?

Business is good and getting better. We’re a few years out of the financial crisis, and the economy is plugging along – but not at the rate we’d like.

Any one area looking particularly good? Bad?

No, nothing specific.

Describe in five words, the state of the banking industry in Maryland.

Resilient, diverse, committed, trusted, lending

What is the biggest challenge facing the banking industry in Maryland?

Regulatory challenges and a spotty economic recovery. In some ways they go hand-in-hand. As an industry we support strong regulation. However, the pendulum has swung so far in one direction that the cost of compliance is outweighing the benefit and is diverting focus and resources from the business of banking. The spotty economic recovery reflects two realities: parts of Maryland are flourishing and parts are still working their way out of the recession. Most businesses and consumers are not expanding their balance sheets. When they do consider expansion, it’s a borrower’s market as banks are competing aggressively to capture those new relationships.

What makes your bank stand out from the pack?

The customer is at the center of all that we do. We want to satisfy all our customers’ financial needs and help them succeed financially. For us, it’s about building lifelong relationships one customer at a time.

What are the long-term effects of the recession on your bank? Has it changed the way you work with consumers?

The recession hit customers hard. As a result, we’ve made an even stronger commitment to work with our customers to navigate difficult times – to help them succeed financially.

Any forecasts for 2015?

We’re positive about 2015, and we anticipate slow, steady and continued growth.

Name: Kevin B. Cashen

Title: President & CEO

Company: Bay Bank, FSB

Years on the job: Four years

Headquarters: Lutherville, Maryland

Number of employees: 165

Please share a bit about the history of your bank.

Kevin CashenBay Bank was founded in July 2010 with the acquisition of Bay National Bank from the FDIC. The Bank was founded to serve local consumers, small and medium size businesses, professionals and other valued customers by offering a broad suite of financial products and services, including on-line and mobile banking, commercial banking, cash management, mortgage lending and retail banking. The Bank acquired Carrollton Bank in April 2013 and Slavie Federal Savings Bank in May 2014 and now has total assets of approximately $500 million with 11 branches serving the greater Baltimore region.

How’s business?

Business is steady. The overall market has stabilized and is showing signs of growth in certain market segments. The bank’s growth is coming from both organic growth, as well as through acquisitions.

Any one area looking particularly good? Bad?

The housing market is beginning to show signs of growth after a number of slow years. Small and medium sized companies are also showing signs of growth after a difficult period from 2007-11.

Describe in five words, the state of the banking industry in Maryland.

Stable. Competitive. Consolidating.

What is the biggest challenge facing the banking industry in Maryland?

The current interest rate environment is a challenge for all banks. Consistently low interest rates are difficult on the core banking model. This is a national issue. On a local level, competition from out of town banks has increased and has negatively impacted profitability. Maryland is, overall, a very strong market in the national economy so many banks want to have a presence here. Too many banks can be a negative.

What makes your bank stand out from the pack?

Our commitment to extraordinary customer service. People are looking for a better banking experience, and, as a local bank, we can provide that. We are local, nimble and responsive to the market. All of our decisions are made locally by people who know this market. Management is accessible and lives in these communities.

What are the long-term effects of the recession on your bank? Has it changed the way you work with consumers?

We are somewhat unique in that the recession has created opportunities for our bank to grow as we are growing through the acquisition of banks that were impacted by the recession. Having said that, the effects of the recession are still impacting small-and medium-sized business and limiting economic growth. We would all like to see more core economic growth. The recession also drove interest rates to historic lows. This is a double-edged sword for consumers – while many consumer loan products have very low interest rates, the interest rates on deposit products are also at historic lows. Consumers are still adjusting to both sides of this low rate environment.

Any forecasts for 2015?

We hope to see more steady growth as we move further away from the last recession.

Name: Gary J. Martin

Title: President & CEO

Company: MECU of Baltimore, Inc.

Years on the job: 41 years at MECU; two months as CEO

Headquarters: Baltimore

Number of employees: 319

Please share a bit about the history of your bank.

Gary J. MartinMECU was founded in 1936 during the Depression because City employees were being exploited by loan sharks and were not able to take advantage of traditional banks of the day. We are a financial cooperative. Through a strong commitment to our community, MECU grew to include families, then anyone living, working, attending school or worshiping in Baltimore. With our recent purchase and assumption of Advance Bank, we now serve an expanded membership.

How’s business?

MECU keeps growing! We now have over 106,000 members. With the purchase of Advance Bank we have new products we can offer the community, including FHA mortgages, and stronger business products. We’d like to see a better environment for consumer loans.

Any one area looking particularly good? Bad?

On the positive side, MECU’s always had competitive with rates, both on loans and on deposits, and now we have two checking accounts that reward our members for using online tools. The CashBack checking pays members each month to use these tools and the Rewards checking pays an interest rate higher than many CDs. In addition to these accounts, our new online banking platform makes it easier for our members to manage their money. All financial institutions, including MECU, are concerned about and fighting cyber crime and security breaches. Our top concern is the security of our members accounts and their financial health.

Describe in five words, the state of the banking industry in Maryland.

I only need two: Competitive and Challenging.

What is the biggest challenge facing the banking industry in Maryland?

There are two challenges that I see. With the Great Recession there’s been an increase in the Federal regulations that impact our industry and there are more regulations to come. Knowing that the regulatory environment will keep changing leads to a certain amount of uncertainty. Regulations add to our cost of doing business. As a credit union we always focused on doing the right thing for our members and many of our own processes were similar to many of the new safeguards. But now there are new reporting procedures that need to be put in place and many of them restrict our ability to be flexible with our members. Then there is the economy. Although it is improving in parts of Maryland, it’s still not as robust as we would like to see it. The recovery is not consistent state-wide. It depends on where you are in the state, the health of the economy varies from Baltimore City to the various counties.

What makes your bank stand out from the pack?

We are a credit union that serves and focuses on the community. We give back to our members and give back to the community at a leadership level where our members live and work. Our mission and purpose have been constant. From the beginning, through the good times and bad, we have continued to serve our members extremely well by giving them great products and services, the latest technology and still give back to the community.

What are the long-term effects of the recession on your bank? Has it changed the way you work with consumers?

The recession hasn’t change the way we work because we are member oriented. That is the DNA of MECU. We’ve always worked closely with our members and will continue to do so. At the same time, the recession made it more challenging for our members. Many of our members were financially affected by the recession and are still struggling to get back on sound financial footing, just like many others. That makes it more challenging for them and for us to serve them.

Any forecasts for 2015?

We’re looking for the economy to continue to improve. We’ve seen modest improvement but there’s still so much uncertainty that it’s difficult to give a forecast. If I could do that I’d be retired by now. There’s a lot of volatility in the marketplace. Because we live in a global economy there are a lot of external factors that we have no control over, such as tension in the Middle East and Russia, that make it hard to predict. We are hoping for a steady, gradual improvement.

Name: Scott Wilfong

Title: Greater Washington/Maryland Division president and CEO

Company: SunTrust Bank

Years on the job: 17 (joined Crestar in 1997, which merged with SunTrust in 1998)

Headquarters: Scott has offices in Baltimore and D.C.; SunTrust is headquartered in Atlanta

Number of employees: 25,800 (corporate-wide)

Please share a bit about the history of your bank.

Scott WilfongSunTrust Banks, Inc. traces its roots back to the Commercial Travelers’ Savings Bank which was founded in Atlanta on September 21, 1891. Two years later, the bank changed its name to Trust Company of Georgia, which on July 1, 1985, merged with Florida-based Sun Banks, Inc. to create SunTrust Banks, Inc. In 1998, SunTrust merged with Crestar Financial Corp. of Richmond which expanded SunTrust into Virginia, Maryland and Washington, D.C.

How’s business?

Loan demand has increased as companies are focusing on maintenance and technology spending that they had been deferring. We see them financing their capital needs while at the same time maintaining strict expense controls and pursuing higher productivity. Companies also have historically high levels of liquidity as a result of sitting on the sidelines during the recession. Consumers, in some respects, are tracking with businesses. For example, many people put off buying a car over the last few years. They can only do that for so long, however, and we are seeing them stepping up demand. Our auto financing has been very robust.

Any one area looking good? Bad?

Commercial real estate development is strong, but homebuilding is still sluggish. Consumer spending, while not vibrant, is steady. Healthcare and education spending continues to drive a large sector of Maryland’s economy, and our lending shows that. However, our region is still recovering from sequestration, which is impacting the unemployment rate. Maryland’s unemployment increased from 5.8 percent to 6.1 percent in July after shedding 5,500 government jobs; Virginia’s rate inched up to 5.4 percent last month; and D.C. has remained flat at 7.4 percent. It’s hard for the local economy to fully recover until the jobs and consumer confidence return.

Describe in five words the state of the banking industry in Maryland.

Resilient, committed, focused and in business.

What is the biggest challenge facing the banking industry in Maryland?

There is too much capital chasing too few loan opportunities. In an economy that is basically stagnant, we in the banking industry have to ensure that margins and underwriting do not suffer as we compete for business. In addition, the industry is still trying to understand the new regulatory environment under Dodd-Frank and its implications for profitability and product offerings.

What makes your bank stand out from the pack?

As a company, we are committed to promoting financial well-being. For business clients, that means helping them grow efficiently and profitably. As businesses mature and become more complex, they tend to increasingly rely on industry-specific expertise and capital markets transactions. SunTrust is uniquely positioned to offer this. We call this “delivering the whole bank” and it distinguishes us from competitors. Regional banks may not have investment banking capabilities and global banks may not make these services available to middle market businesses. However, we know that a commercial client could benefit from our investment bankers’ deep industry expertise if their goal is to grow in the future. We actively look for ways to better serve clients without regard for lines of business. That’s not how clients think and it’s not how we approach the relationship.

What are the long-term effects of the recession on your bank?

Has it changed the way you work with consumers? Bankers across the industry realized they had to get back to basics. That is especially important in an industry that has become more competitive over the past five years. For SunTrust, that meant a renewed focus on serving our clients even better. We take a client first approach and don’t think in terms of “what can we sell you?” Instead, we focus on learning what our clients need to grow or achieve their objectives, and then work with our colleagues across the bank to find the right solution. As a result of this approach, we build rapport with clients and develop relationships that are deeper and, hopefully, last for a long time.

Any forecasts for 2015?

It’s clear that 2015 should see some interest rate movement unless the economy stalls dramatically in the first half of the year. Employment gains will likely be moderate and businesses will begin to leverage some of their liquidity for growth. I expect monetary policy will be balanced to assure continued recovery from the recession. At SunTrust, we will continue to build our competencies in wealth and wholesale banking while leveraging technology to deliver banking services to our retail clients.