Even though he’s now fully retired, James Smith, longtime leader of Webster Financial in Waterbury, Conn., faced the same problem confronting many of his former banking peers — having a project derailed by the coronavirus pandemic.
Smith had spent the past eight months working with a coalition of private executives, nonprofits and academics on an economic action plan for the Connecticut economy, which was hurting even before the economic shock from COVID-19. The group was about to release a revitalization proposal covering topics like workforce needs, investments in infrastructure and business development when the virus hit.
The crisis arguably has made the project more important — and harder. The pandemic and associated shutdowns have put the economy in greater jeopardy and could have long-lasting implications for the way people live and work. Those new realities should factor into any rescue proposals, he said.
“Given what we’ve learned from COVID and the effect that it’s had on this state and its communities, we need to step back and take a fresh look,” Smith said of the effort. “I think in the end, we’ll reframe the plan. We’re thinking now instead of a grand plan; we have to think in terms of, first you reopen, then you recover, then you reimagine.”
It remains to be seen whether more retired bankers will follow Smith’s lead in communities around the country that will be seeking to recover from the pandemic and recent public unrest after the police killing of George Floyd in Minneapolis. Smith certainly offers a road map for those looking to get involved.
Though Smith plans to do consulting work for small and midsize banks in need of capital management help, he’s become increasingly involved with public life.
Shortly after he stepped down from his post as CEO of Webster in 2017, Smith co-chaired a blue-ribbon panel of mostly private-sector executives tasked with making
He and his successor John Ciulla recently completed the final phase of the succession plan at Webster. At Webster's annual meeting in April, Ciulla added chairman to his titles of president and CEO, becoming the $31.7 billion-asset company’s third chairman and the first who isn’t a Smith.
Smith recounted some of the highlights of his career in recent conversations with American Banker, including the day he renamed the bank in honor of his father and its founder,
He also described “the most important lesson of my banking lifetime” as being a strategic decision to stick to what Webster knew best: community banking, commercial banking and health savings accounts. During a mid-1990s growth spurt, Webster had picked up various other financial services businesses, like private banking and wholesale mortgage warehousing, often because they came with bank acquisitions.
“Our vision at that time may have exceeded our grasp a little bit, and we spent the next several years retrenching into those businesses that we know the best,” he said. “And right in the middle of that reassessment and strategic review came the Great Recession.”
Despite a relatively wealthy and well-educated workforce, Connecticut has experienced anemic economic growth since the recession. Its state budget is weighted down by unfunded pension obligations, and its business tax base has continued to shrink. It has also lost population as millennials have generally moved elsewhere for job opportunities.
But Smith says the state may be able to benefit from consumer behavioral changes resulting from the pandemic. If, for example, more people choose to telecommute, they might be more inclined to move to less densely populated areas — especially if the state builds faster, high-quality rail service connecting Hartford, New Haven, Stamford and New York.
Smith is also worried about small businesses, particularly those owned by women and minorities, in Connecticut’s cities. He expressed concern that they would not only suffer from the pandemic but would also be disproportionately shut out of emergency small-business relief. And investment in education, job training and health care in the state’s urban centers must be a critical piece of the resulting plan, he said.
Smith said “it’s unlikely” he will consider another political run at this point, instead preferring to focus on policies that could help jump-start business growth and workforce development in the state. Bankers can, and should, give back to their communities in other ways, he said, although he credited the industry with already being generally civic-minded.
“It would be a blessing for their communities. Banking is a noble business, in my opinion, and the people in it do believe in investing in their communities,” he said. “We have a responsibility to take what we’ve learned in our careers and invest it in our communities as we go forward.”
