10 Who Had a Good Year
December 22, 2015 7:30 AM
It was a year of big deals, big promotions and, for some banks, big improvement. Here are the folks who emerged as winners in 2015.
Dave McKay/Russell Goldsmith<br><em>Royal Bank of Canada</em>
Talk about making a splash. Dave McKay had been CEO of Royal Bank of Canada for all of six months when he struck a blockbuster deal to acquire City National Bank in Los Angeles for $5.4 billion. The deal, by far the year's largest, marked RBC's re-entry into U.S. retail banking after selling its disappointing Southeastern operation to PNC Bank in 2012. This time around, RBC is getting a highly profitable franchise that's made a name for itself financing Hollywood productions and banking high-net-worth families. The deal, which was announced in January and closed in October, was also a huge win for City National's longtime chairman and CEO, Russell Goldsmith. His family pocketed an estimated $700 million in the sale, and Goldsmith gets to keep his job as head of RBC's U.S. unit, which retained the City National name.
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John Thain<br><em>CIT Group</em>
It wasn't long ago that John Thain was seen as the poster child for Wall Street excess. As Merrill Lynch was going down the tubes in 2008, Thain, its then-CEO, was reviled for spending $1.2 million of shareholders' money renovating his office. But this is a country of second chances and Thain made the most of his. He took over the teetering CIT Group in 2010 and righted the ship by raising fresh capital, entering new business lines and unloading ill-fitting ones. Then, with CIT finally on firm footing, he struck a deal in 2014 to acquire OneWest Bank, transforming CIT into a more bank-like entity that now offers traditional banking products to go along with its specialized lending services, like factoring and asset-based lending. CIT's turnaround is now complete and Thain will step down as CEO in March with his reputation redeemed.
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Tim Sloan<br><em>Wells Fargo</em>
Several large-bank CEOs are approaching retirement age and a popular game in industry circles is guessing who will succeed them. At Wells Fargo, it would appear that Tim Sloan has the inside track on eventually replacing John Stumpf. After serving 18 months as the bank's head of wholesale banking, Sloan was promoted in November to president and chief operating officer. In the new role, Sloan who had been Wells' chief financial officer from 2011 to 2014 will oversee three of the bank's largest business lines: community banking, consumer lending and wealth and investment management. Wells did not come out and say that it is grooming Sloan to be CEO, but it's worth noting that the bank has not had a chief operating officer since 2007. The last person to hold that title was Stumpf.
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Marianne Lake<br><em>JPMorgan Chase</em>
Another big-bank executive whose profile rose significantly in 2015 was JPMorgan Chase Chief Financial Officer Marianne Lake. Lake didn't receive a promotion as Sloan did, but her career received a boost over the summer when CEO Jamie Dimon announced that Lake would start taking the lead on the bank's quarterly earnings calls with analysts. "One of these days I'm not going to come in on this call," Dimon said at the time. Lake is widely viewed to be on the short list of Dimon's potential successors and his gesture would seem to enhance her candidacy. It was also a big year for Lake personally as she had twins to go along with an older son.
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Robert Wilmers<br><em>M&T Bank</em>
Patience paid off for M&T Bank and its longtime Chairman and CEO Robert Wilmers. The $97 billion-asset company finally secured regulatory approval to buy Hudson City Bancorp, which allowed it to complete the long-delayed deal in November, ending a wait that lasted more than three years. Wilmers' unwavering support of the acquisition showed steady leadership, and it should prove beneficial as M&T settles into new markets in New Jersey. And M&T's stock price is up 45% since the deal was announced in August 2012.
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Margaret Keane<br><em>Synchrony Financial</em>
Margaret Keane has finally gained the autonomy she has craved since taking the helm of GE Capital Retail Bank in 2011. While the unit, which specializes in store-branded credit cards, was spun off into the newly named Synchrony Financial in mid-2014, GE retained roughly 85% ownership until a few weeks ago. Now that the spinoff is complete, the buck truly stops with Keane and she couldn't be happier. She's eager to pursue new merchant partnerships that may not have passed muster with her old GE bosses. She's also ramping up investment in emerging technologies as she aims to position Synchrony as a leader in mobile payments. "GE didn't necessarily hold us back, but they kind of kept us in a box, for sure," Keane said at an investor conference in September.
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Kessel Stelling<br><em>Synovus Financial</em>
Remember in 2013 when Synovus CEO Kessel Stelling was mocked by analysts for suggesting that the company was eyeing acquisitions ? What a difference two years make. Apart from buying a small failed bank two years ago, Synovus has yet to strike a deal. But even its onetime critics would have to acknowledge that the Columbus, Ga., company is healthy enough now to do so. With expenses under control and loans and deposits growing at healthy clips, profits are soaring and its once-languishing stock now actually trades at a modest premium to its peers. Look for Synovus, which once appeared to be a surefire takeout target, to start buying banks again in 2016. "We
now have a currency that would certainly allow us to look at [M&A] opportunities," Stelling said on the bank's third-quarter earnings call.
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Kevin Kim<br><em>BBCN Bancorp</em>
Kevin Kim, chairman and chief executive of BBCN Bancorp in Los Angeles, was a popular guy in 2015. He recently announced plans to buy Wilshire Bancorp , also in Los Angeles, to firmly cement BBCN's claim on being the nation's biggest Korean-American bank. The deal allows BBCN to confidently cross over $10 billion in assets by creating enough expense-cutting opportunities to offset higher compliance costs and caps on interchange fees. Those accomplishments were so alluring that Hanmi Financial made an unsolicited public overture to merge with BBCN, which Kim soundly rejected. Not bad for someone who has been his company's CEO less than two years.
Activist investors
A large number of bank mergers this year were spurred by shareholder activists , who make money buying large stakes in underperforming institutions before pushing the companies to sell themselves. Increased consolidation, including the sales of Naugatuck Valley Financial , Metro Bancorp , and Cheviot Financial , has been a boon for firms such as Seidman Associates, Joseph Stilwell's Stilwell Group, PL Capital and Basswood Capital. The $15 billion-asset Astoria Financial's agreement to sell to New York Community Bancorp also shows that activists are gaining traction in getting bigger institutions to find buyers .
Thomas Sung<br><em>Abacus Federal Savings Bank</em>
Tiny Abacus Federal Savings Bank scored a big victory in 2015 because it refused to back down from the federal government. Its ordeal started in 2012, when the government accused bank employees of falsifying loan documents as part of what it called a "systemic and pervasive mortgage fraud scheme." But Thomas Sung, the chairman of the $250 million-asset, family-owned bank in New York's Chinatown community, dug deep into his own pockets to fight what he said were bogus charges and, in the end, he prevailed. It cost $10 million in legal fees and who knows how much in lost business, but in July a New York jury acquitted the bank and employees on all charges.
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