Turnaround artist Parsons 'left everything better than he found it'

Bloomberg News

In 2009, as Citigroup was struggling to recover from the financial crisis, one of its longtime board directors, Richard "Dick" Parsons, took the reins as chairman.

Parsons, who died Thursday at age 76, went to work on rehabilitating Citi, which had received $45 billion in bailout money from the U.S. government in an effort to stave off its collapse.

Donald Felix, who had been working on a new global wealth management revenue strategy for Citi, became Parsons' chief of staff.

"I'm not sure he would always get as much credit as is rightfully due to him for the leadership he displayed," Felix, the recently appointed CEO of Carver Bancorp in New York City, told American Banker on Friday. "He did a really wonderful job of providing direction and guidance … leaning all the way in to help Citi navigate the crisis in a way that was needed at that time."

Parsons led several other corporate turnarounds during his long career, including a stint at Long Island-based Dime Savings Bank during the savings-and-loan crisis of the late 1980s and early 1990s.

Parsons' legacy in banking was "turnarounds, transformation and growth," according to Felix. "And navigating difficult situations to successful conclusions. He left everything better than he found it."

Before Parsons became known for fixing distressed companies, he was a lawyer and advisor to Nelson Rockefeller — first as New York governor, and later, as U.S. Vice President. In the early aughts, he helped steady the ship at AOL Time Warner, which is now known as Warner Bros. Discovery.

In 1988, eight years before Parsons joined the board of Citibank, he was named president of Dime. At that time, the savings-and-loan crisis was in full swing, and Dime was struggling with bad mortgages. It would report a $92 million loss in 1989.

The following year, Parsons was promoted to CEO. He later merged Dime, which is now known as Dime Community Bank, with Anchor Bancorp in Hewlett, Long Island.

Alex Hillman joined Dime in the early 1990s to help lead the technology side of the mortgage bank. Hillman worked on a project, led by Parsons, to clean up the company's mortgage portfolio. The effort, which allowed Dime to securitize and sell hundreds of millions of dollars of mortgage loans on the secondary market, "probably saved the bank," Hillman said.

Hillman said that Parsons, despite being "three levels above" him, was down to earth, personable and "an amazing person."

Parsons was decisive, but not aggressive, Hillman added, which he said wasn't the case with every bank leader he's known.

"He got the results he wanted, but in a way that was a pleasure to work with," Hillman said.

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Citi was on the rise when Parsons joined its board in the 1990s, taking advantage of regulatory changes to become a so-called "financial supermarket."

But the megabank found itself in trouble when the subprime mortgage crisis struck. In late 2008, Citi was insolvent, even after receiving a $25 billion taxpayer bailout. A few months later, it received a second government bailout — this time, $20 billion in capital.

Parsons took over as board chair from Sir Winfried Bischoff, who stepped down after the bailout. He remained in the position until 2012.

Citigroup CEO Jane Fraser said in a statement Thursday that Parsons "applied his legendary leadership capabilities during an incredibly challenging time for our company." Citi's current board chair, John Dugan, said Parsons' "deep experience in banking, government and countless boardrooms helped Citi navigate a path through the crisis and back to stability."

Felix credited Parsons for bringing various stakeholders to the table during a stressful time.

"One of the things that was so special about him was watching him work and watching him navigate relationships so successfully," Felix said. "He had a tremendous leadership style that cut across different industries and made him a champion to many, including me."