Tower Bancorp Chairman and CEO Andrew Samuel might elicit some double takes when he passes out business cards next year.
Samuel is slated to become the chief revenue officer at Susquehanna Bancshares in Lititz, Pa., which is buying the $2.6 billion-asset Tower in a deal expected to close in the first quarter of 2012.
The chief revenue officer post is new for Susquehanna, and a novelty in the banking industry. More familiar titles like chief lending officer or chief banking officer wouldn't do in Samuel's case, he says. A chief lending officer focuses strictly on loans, while a chief banking officer might have only moderately broader duties that include deposits.
Susquehanna owns several nonbank units, including an insurance agency, two wealth management firms and companies that lease vehicles and commercial equipment. "The difference is there are so many business lines that generate revenue," Samuel says.
Susquehanna Chairman and CEO William J. Reuter says the chief revenue officer's primary mission will be to bolster cross-selling for the multifaceted company, which will have $17.8 billion of assets after it absorbs Harrisburg, Pa.-based Tower and another recent purchase, Abington Bancorp, of Jenkintown, Pa.
"This approach makes sense to us," Reuter says of the new job, which also might involve securitizing small-business loans for sale in the secondary market. "It gives additional emphasis at the top management level to top-line revenue production."
The pressure on revenue is ratcheting up, with the struggling economy, low interest rates, and increased regulation all taking a toll. New rules for debit-card fees, for example, will shave $6 million off annual revenue at Susquehanna, Reuter says. "They're the types of headwinds that the industry has that everyone has to come to grips with."
The company is shaking up more than its organizational chart as part of the revenue initiative.
After the merger, Susquehanna will split its regions into smaller units in an effort to get closer to customers, Reuter says. The bank's three regions could become as many as 18.
To ensure employees reach across business lines, incentives will include regional profit goals. "You can't have sales folks that have a myopic view," says Samuel, who will report directly to Reuter.
Cross-selling is a familiar concept for bankers. The chief revenue officer is not.
"I searched our database. It's not there on any of the resumes," says Janis Risch, chief operations officer for Russell Stephens, a Los Angeles executive search firm that specializes in banking.
But titles change. And as Risch notes, lots of banks have added chief risk officers and chief information officers in recent years.
A handful of companies already have tried out the idea of a chief revenue officer. It fits best for banks with multiple business lines, says J. Bradley Scovill, who held the position at the former Sterling Financial in Lancaster, Pa., when the company added it in February 2006.
"If you don't provide real senior leadership and a drive to cut through the silos and get people to work together and coordinate those activities, it doesn't get executed consistently," says Scovill, now chief financial officer at Kish Bank in State College, Pa.
The chief revenue officer job is such a rarity that analysts can't say whether the approach works. Sterling's experiment with it was cut short. Not long after creating the post, Sterling discovered potential fraud at an equipment-leasing unit and subsequently agreed to sell itself to PNC Financial Services Group in May 2007.
If revenue rises at Susquehanna, other banks will take notice, says Rick Weiss, an analyst at Janney Montgomery Scott in Philadelphia.
"For now, it's hard for outsiders to really tell whether this is going to be too many people just having meetings to have meetings," Weiss says.
But, he adds, "It's good to see a bank trying to hire someone to drive revenue, instead of yet another person to deal with regulators and compliance."
