Saturday, August 12, 2017

Bank Loan Leading Indicators

I recently shared a long ride with a colleague discussing a Capital Plan project we were working on. In Capital Plans, you would typically use baseline projections, usually taken from the strategic plan, and apply adverse events that, based on the bank's balance sheet and strategy, can occur. Even if they are not particularly likely to occur. 

But it's planning. And planning for bad stuff is part of planning. Life isn't all sunshine and rainbows.

As part of our commute discussion, we talked about leading versus lagging indicators of adverse events in order to reduce the impact of such events. Many if not most adverse events are beyond the bank's control. Because risks don't typically come home to roost at the time the Board or Management decide to accept the risk. Lagging indicators are easy, such as the migration from 30-89 days past due, 90+ past due, and non-accrual loans.

But lagging indicators are history. It would've been nice to know that Lee Harvey Oswald was heading to the sixth floor of the Texas School Book Depository. Unless you're Oliver Stone. Then you're wondering who Lyndon Johnson is talking to. I digress. Stopping Oswald or diverting him likely would've ended in a different result.

Can banks identify leading indicators that can reduce risk at the right time?

I was never a lender. And my firm is not in Loan Review or other areas involved with the evaluation of credit. Nor are we an ALCO firm, estimating Interest Rate Risk or Liquidity Risk. But we do Strategic Plans, Capital Plans, Process Reviews and General Advisory that deals with how banks identify and mitigate risk. 

Credit risk remains the greatest risk to a financial institution by far, in my opinion. Not even close. Although examiners and consultants will tick off a laundry list of risks that could put your bank in peril, like reputation risk. The way reputation risk is likely to roost is through liquidity risk. Customers lose confidence in your bank and your liquidity position takes a nosedive. But has many financial institutions suffered as much reputational damage as Wells Fargo recently? And their liquidity ratio is over 40%. They have plenty of liquidity.

No, I'll stand by my credit risk statement. Take the IndyMac domino effect. They had credit problems that came home to roost, Senator Chuck Schumer wrote a letter to the OTS about the bank's problems, and due to the reputation risk customers made a run on the bank. Liquidity is what put them under. Credit is what pushed the first domino.

Identifying leading indicators for credit risk isn't particularly difficult. Finding research that makes the correlation is. But I will list what I think are common-sense leading indicators to credit risk that may very well be effective, and hopefully can be tracked and monitored automatically so we don't have seven risk management analysts on staff hunting and gathering data.

JFB's Credit Risk Leading Indicators
1.  Residential and Commercial Real Estate, and Construction Lending: Trend of days on market (by property type)

2.  Residential and Commercial Real Estate, and Construction Lending: Trend of the difference between initial asking price and actual sale price (by property type)

3.  Commercial and Consumer Lending: Trend of average balance per commercial checking (by NAICS code), and retail checking accounts

4. Residential and Construction Lending: Trend of price index for single family homes under construction

5. Residential, Commercial Real Estate, and Construction Lending: Average checking account balance trends for your customers in the Real Estate Development NAICS

6.  Commercial Real Estate and Multi-family Lending: Trends in occupancy rates.

These are a few that I have seen or make sense to me. Could they be downloaded into a dashboard so bank management could see the trends, and modify risk appetites to curtail new lending in categories that are showing yellow or red? And advise your bank's borrowers on how to navigate difficult times to preserve their business to fight another day?

Do you agree with the above indicators and what others should be considered?

~ Jeff





Monday, July 31, 2017

Are Banks Overvalued?

The S&P 500 Bank Index is up 41% in one year. US Regional Banks' price-earnings multiple was 16.6x and price to tangible book value was over 2x (see chart). So are banks over-valued?

It depends. One way to compare is to look at the p/e ratio compared to the market. The S&P 500 p/e currently stands at 24.6x. So it looks like bank stocks are not overvalued.

But hold on. One ratio that can help us out is the PEG ratio. Remember that in Finance class? It's the p/e ratio divided by the earnings growth rate. According to Peter Lynch's iconic book One Up on Wall Street, a stock is fairly priced if its PEG ratio was 1. Meaning if it's p/e is 16.6x, like the US Regional Banks mentioned above, then the earnings growth rate should be 16.6%. I know I'm comparing a multiple to a growth percent. But, hey, I didn't invent the PEG ratio.

The challenge with banks' PEG ratio, as the chart shows, is that it is way over 1, by a factor of over 5 (5.7). I checked it against other industries in the Financial Services sector. Insurance brokerage has a PEG of 3.4. Specialty Finance: 0.4. The regional banks' PEG ratio, if I do the reverse math, implies that earnings are growing around 3% for the banks in that index. Which is very close to the 3-year annual net income growth for all FDIC insured banks.

So by the PEG ratio, banks would appear to be over-valued. Which may be true. But I want to bring up two mitigating points about banks:

1.  Banks are capital intensive. We must contemplate that implicit in their p/e ratio is some level of their tangible book value.

2.  Banks are not, in general, growth stocks long term. Risk management and the legions of regulators work in tandem to limit growth. 

Relating to 1, I did a data run of all banks and thrifts between $1 billion and $10 billion in total assets that were profitable. I checked their median p/e ratio. I then took their market cap and deducted their tangible common equity to deconstruct their p/e between tangible book and their market cap over tangible book (see chart). 

It is true that other industries can deconstruct p/e in this fashion. But would such an analysis of other industries equate 56% of an industry's p/e to it's tangible book value?

Even if we deducted tangible book from p/e, the industry PEG would still be 2.53 (7.6x / 3% growth), more than double Peter Lynch's prediction of fairly valued.

Which brings me to 2. How long can a company, a sector, and an industry grow faster than its markets? Certainly not forever. And for many, earning their p/e's means stoking growth either through acquisition, or greater risk taking. One is risky, and the other can be deadly. 

For these reasons, bankers may want to consider more moderate growth objectives, maximize earnings, and pay a larger portion of shareholder returns in dividends. 

What is your opinion on bank valuations?


~ Jeff


Note: I make no investment recommendations in my blog. I have a difficult time with my own portfolio. 

Friday, July 21, 2017

Health Insurance: A Bank Problem Too

Bank health insurance premiums have escalated to the point of cutting back benefits. As a nation, our system is not working, whether it be Obamacare or pre-Obamacare. The cost continues to escalate.

An industry publication recently contacted me for some commentary on their "Best Banks to Work For" annual piece. Naturally, I had opinions. When I analyzed their list two years ago, I noted that the financial performance of those banks was similar to banks that didn't make the list. Greater investments in personnel and employee benefits did not result in inferior financial performance.

I also noted that the most cited benefit by employees of banks on the list was gym and health initiatives. And generous benefits was near the top, at fourth. Remember the days that employees would seek banks out for stability, fair pay, and employee benefits? Merger mania has nearly eliminated stability, and the rising cost of healthcare has led to many banks cutting back on generous benefits, removing another competitive advantage in the employee marketplace.


It should be noted that the data in the accompanying charts came from employers. Not premiums in the Affordable Care Act marketplaces so often cited by lawmakers. But the escalation of premiums continues to far exceed inflation and will continue to put pressure on banks' bottom line unless they prune benefits even more.

So I would like to chime in on the healthcare debate, because we can no longer rely on media outlets to provide us with the information to make informed decisions. They cover protests. And protesters are likely to be people that receive free or highly subsidized insurance. I doubt there are net payers to the health care system out there protesting that they should pony up even more for the net takers.

The media covers inflammatory political rhetoric. Like saying one proposal or another will kill people. Not fact-based debate. Too boring. As evidence, look for the oft-quoted CBO stat that one proposal will result in 20 million more uninsured people. The next sentence should say, "the vast majority of which would choose to not participate". Does the media coverage say that? There ya go.

Any health care proposal should be: 1) private, 2) widespread, 3) transparent, 4) favor freedom.

So here are my thoughts:

Health care is a group system. If someone gets sick and consumes more than they contribute, the cost is made up through a pool of people that are paying more than their consumption. That is truth no matter if it's private insurance or government paid. But single payer, or government paid insurance where it's a continual transfer from one group to another is a bad idea. Look at the VA. True competition will come when the payer of services is the consumer of services. Look at auto insurance. We're forced to buy it, and we do so privately. Bad drivers pay more than good drivers. And the Camaro owner pays more than the Camry owner.  

So the JFB health care plan would be private health insurers.

To give small business, the life-blood of our economy, negotiating leverage with private insurers, I propose we allow businesses to affiliate through trade associations, unions, etc. across the country, not state lines. This also applies to an individual market. Allow them to affiliate, through churches, trade associations, etc. 

I propose there be a required minimum basic coverage that keeps families out of bankruptcy should they fall ill and encourages preventative care. Such as a high-deductible Health Savings Account (HSA) plan that has a maximum out of pocket (MOOP) per annum per family of about $10,000, adjusted for inflation. There must be language to limit political influence in this law. One of the failings of Obamacare was putting in political wish-list stuff for social engineering. Such as birth control. To keep teenagers from making babies. Sort of like mandatory parenting. The Basic Plan should be simple and protect families from bankruptcy for extraordinary medical expenses and encourage preventative care. 

I like HSA plans because it puts individual skin in the game. You want to load the shopping cart with Oreos or smoke a pack a day. It will cost you much more than me. Skin in the game. Put behavior and cost of the behavior as close to the individual as possible so there is consequence. I'm an accountability type of guy.

States can have overlays to keep state control. Especially since the Federal mandate will be Basic. But regulation and enforcement of the national law would be national. Regulation of overlays can be state-based. So if California wants to jack up the prices of plans to include medical, recreational, and Cheech and Chong level marijuana use, it's on Californians. We're not going to charge Kentucky for it.

My apologies to the freedom lovers, but we must compel people to buy insurance. In 1985 we required hospitals to treat whoever came to the emergency room, regardless of their ability to pay. That is why you would have to wait so long to get your broken arm fixed. Someone checked in before you with a head cold. Remember those long wait lines in the emergency room? Free health care for those that chose not to buy health insurance. Free riders. No more. This also solves the adverse selection problem in health insurance. People that don't participate in a health insurance plan if they are healthy (i.e. net payers). Many wait until they are likely to be net takers.

Make insurance transparent through a pricing portal run by your insurance company. Insurance companies negotiate different rates for different services by provider, and by insurance plan. It is nearly impossible to make an economic decision. I remember my daughter being at the doctor and was diagnosed with hip dysplasia, a common problem for growing female athletes. The doc said he was 95% sure this was the issue. If we wanted him to be 100% sure, he would need an MRI. I asked how much that would cost. He was taken back by the question, but left the room and asked his admin staff, and they came back with somewhere in the $900 range. That would come out of my HSA. So I decided his 95% was enough. I balanced an economic and medical decision. If a third party paid for it all, I probably would have gotten the MRI. See the problem?

Under the JFB plan, there would be an app that prices out services and service providers so everyone knows the price of their decision, including the prices of local doctors.

Medicaid should be transitory. We are creating a lifelong needy class in our society. It's moving closer towards indentured servitude to the government. Which is dangerous. Check history. However, keeping with the theme of pushing things more local, states can keep ponying up for people that aren't employed, lack the basic plan, and have lots of protest time. Their choice.

Companies can compete for talent based, in part, on their additions to basic coverage. They have the option to make HSA contributions and premium contributions to the basic plan, add benefits, or all of the above. Making it easier for would-be employees to determine which insurance offering is better, and tilt the scales towards those that are more generous, and creating transparent competition for talent. 

That's it. Simple. Transparent.

What do you think?


~ Jeff

Saturday, July 08, 2017

Guest Post: Financial Markets and Economic Update by Dorothy Jaworski

Here we are in July already!  The markets continue to roll and bond markets continue to trade in a 25 basis point range, hitting the higher end when they think the economy is strong (why else would the Fed raise rates?) and hitting the lower end when the weak economic data smacks them in the face.  I usually write with a cautious tone.  Many of my economic views contain the word “weak.”  I do not take this lightly.  I believe that we are in this era of weak growth, now eight years old, for the long haul unless changes are made to regulation and we stop adding debt at break-neck speed.  In this environment, it has been an achievement for our economy to grow at 2%. 

OMG- The Phillips Curve!
Janet Yellen, like Ben Bernanke before her, is using the Phillips curve to shape policy.  Remember that the Phillips curve is based on a set of formulas where unemployment and inflation have an inverse relationship.  With unemployment going down, inflation must go up, right?  Well, it did for a while, and now it is heading down, too.  The Fed must think it will rise again and they are raising rates in anticipation.  They must not see falling oil prices, weak GDP growth, falling gold prices, a narrowing Treasury-TIPS spread, rising debt levels, lower consumer spending, a low labor force participation rate, low productivity, and consumer prices so weak that major retail companies are closing stores at a record pace.  Someday, we will all simply shop online at Amazon and Walmart.  We will not even have to drive anywhere, since everything will be delivered to our front door.

The Fed has raised rates by 25 basis points twice so far in 2017 and has promised one more increase.  They believe that inflation is coming and that is fine.  They believe that they should raise rates because they were too low and that is fine, too.  If the Fed was motivated by the data, or their moves “data dependent” as they always claimed, they would not have raised interest rates.  Weak readings on employment, housing data, and retail sales won’t stop them.  Rising debt levels will not stop them.  Household debt in 1Q17 totaled $12.73 trillion, crossing the previous high mark of $12.68 trillion in 2008.  They are moving ever closer to a flat yield curve and slowing down 2% growth.  For what reason?  Well, maybe the Phillips curve…

The Fed also announced at their June meeting that they would be “normalizing” their balance sheet “soon,” which means reducing it by letting bonds mature and not replacing maturities or cash flows.  Remember all of the quantitative easing, or “QE,” purchase programs?  All of those bonds are on the Fed’s balance sheet to the tune of $2.5 trillion in Treasuries and $1.8 trillion in Agency mortgage backed securities.  Their “normal” balance sheet size would be under $1 trillion.  It is expected that $50 billion will not be reinvested monthly.  They also stated that they will do this “normalization” provided that “the economy evolves broadly.”  Who has any idea what that means?  It is my belief that they will proceed with this “normalization” no matter what, regardless of the cost.  Longer interest rates will tend to rise after losing a buyer for longer term MBS and mortgage rates will rise as a result.  With housing weak, our economy will be weak, and no one should be surprised.  Incidentally, Chair Janet Yellen’s term at the Fed expires in February, 2018.  There is already speculation that she will not be re-nominated.  That may be just in time for the easing to begin.

Presidential Agenda
I am very surprised that the markets are not having fits over the lack of progress on the presidential agenda.  The promises included tax cuts to 15% (although a much less dramatic decrease is expected), repeal and replacement of ObamaCare (stalled in the Senate), regulatory reform (some energy rules relaxed, but not much else), infrastructure spending to repair and replace our crumbling structures, roads, airports, electrical grids, etc.  Patience, they say!!  I believe that the stock markets believe that eventually the agenda will be accomplished.  And some good ideas have been presented, including job training and increased education for those whose skills may not match available job openings.

The Pool of Available Workers
When Alan Greenspan was Fed Chairman, he always looked at “augmented” unemployment numbers which were calculated using the pool of available workers (sum of the unemployed plus persons who want a job but are not counted in the labor force).  The augmented rate for May, 2017 was 7.5%, compared to the headline rate of 4.3%.  The pool stands at 12.4 million persons, including unemployed of 6.9 million, at the end of May, 2017.  This level compares to 12.3 million at the end of December, 2007, before the crisis hit in 2008.  The level reached 16.7 million in December, 2008 and the peak occurred in October, 2009 at 21.4 million.  It took nine years to return to pre-crisis levels.  It seems we have achieved the recovery of employment.  But why does it not seem so?  Maybe it does not feel right because wages have not kept pace, meaning inflation remains low.  We shall see.

Company Expenses Seen Rising
Corporate expenses are on the rise.  For years, regulatory and compliance costs have been growing dramatically.  Physical security costs ramped up over the past 15 years; just ask the airlines and Homeland Security.  Now an even greater threat promises to raise costs even more- the threat of cyber attacks.  Recently, we have seen ransomware virtually cripple company’s networks and Internet access, as criminals exploit vulnerabilities in Microsoft’s Windows operating system.  Some of the ransomware even has names:  WannaCry and Petya Clone.  Thieves lock up computers by encrypting files and access and demand ransoms, usually small amounts such as $300 in bitcoin.  This is becoming an increasingly frightening scenario.  In the age of
“The Internet of Things,” where every appliance and device under the sun is connected to the Internet, someone should be losing sleep.

An Even Larger Hadron Collider

Where else can you get updates on our favorite machine?  There is some excitement about the plans to build a new Hadron Collider that will be bigger and better than the machine today.  The new one, called the Future Circular Collider, will be three times as long and ten times as powerful.  It is in the planning stages and will be ready by 2035.  Considering that the current Collider took 30 years to build, that’s not a long time to wait.  Expect digging to occur under the mountains of Europe in a few years.  Let’s just hope that they put covers on this one so that birds cannot drop baguettes inside!   

Thanks for reading!  DJ 07/04/17





Dorothy Jaworski has worked at large and small banks for over 30 years; much of that time has been spent in investment portfolio management, risk management, and financial analysis. Dorothy has been with Penn Community Bank and its predecessor since November, 2004. She is the author of Just Another Good Soldier, and Honoring Stephen Jaworski, which details the 11th Infantry Regiment's WWII crossing of the Moselle River where her uncle, Pfc. Stephen W. Jaworski, gave his last full measure of devotion.

Friday, June 30, 2017

Book Report: The Unbanking of America by Lisa Servon

Let me start with the author's ending: "In order to repair the system, we need a shared understanding that access to good financial services is a right, not a privilege for the fortunate few. We need to demand financial justice."

That is how the book ended. If I read it first, I probably would have returned it to the shelf. But no, I made the commitment to read it when recommended by a colleague, and it was quickly on my Kindle. Something about it being on my Kindle compels me to read it. So I trudged through it to get to her takeaways, which, when I read them, I could have guessed her bio before I read it. Professor of city and regional planning at the University of Pennsylvania.

Didn't see that coming.

Without further anticipation, here are the book's takeaways with a little editorial commentary from me:

Amazon Link
1. Change the relationships between banking and government. She argues for renewed government involvement in the consumer financial-services sector. Stating the relationship has shifted to "favoring bank profitability and efficiency over public needs." She further argues the government doesn't hold banks accountable to serve all Americans equally well. 

There were ideas in the book to accomplish this that I must report to you: a) Subsidize banks to serve customers with financial instability who are not profitable. b) Enable mission-oriented banks and credit unions to extend their reach. She cited Amalgamated Bank (lost $5.8 million over past five years), Carver Federal Savings Bank (lost $4.9 million), and Lower East Side People's Credit Union (only $50 million in assets, yet profitable on a 5+% net interest margin). c) Have the Federal government provide banking services. She cited Post Office banking as an example. Saying it would be "not for profit, simply because it's the right thing to do."

JFB editorial commentary:  Not sure the author was fully aware of the impact government involvement has had on those in the lower economic ladder. For example, the securitizing of the residential lending business moved most of that business away from banks to mortgage bankers and brokers, that far and away were the culprits behind preying on the underbanked. Perhaps a little light reading on the FHA, then later FNMA and Freddie Mac are in order. Dodd-Frank, the CFPB, and regulators "disparate impact" doctrine are pushing community financial institutions out of consumer banking. The Durbin Amendment and Reg E reduced fee income in checking accounts, making low-balance accounts difficult for financial institutions to cover costs. Costs foisted on them by, you guessed it, the Federal government through various laws such as BSA/AML. This resulted in the reduction of "free checking" and the increases in required minimum balances. So forgive me if I am somewhat indignant about sending in the Feds to exact more carnage. Oh, and we already have subsidized financial institutions to serve the underserved. They're called Credit Unions. They pay no Federal income taxes.


2. Enable better decision making. Hold financial service providers accountable by requiring them to make it easier to compare products and make informed choices. Like a fact-box on packaged foods.

JFB editorial commentary: Funny that she talked about the reams of disclosures that confuse the public. These disclosures are required by law and bank regulators. *irony*


3. Create a sandbox for innovators. She admits that regulation stifles innovation. 

JFB editorial commentary: This is already happening, without government intervention. Even in spite of it. In a previous post, I offered that banks were slow to use alternative data for consumer loan decisions because of regulatory interpretation of the Fair Lending Act and the disparate impact doctrine. Alternative credit data to make loan decisions would benefit the underbanked. I fail to see how her clarion call for more government intervention sits with this recommendation. 


Alright, I've given you enough of this book. When reading some of this stuff I first thought that the author was simply a pen name for Elizabeth Warren. 

Are we doing the underbanked and unbanked any favors by pointing to a barely existent boogeyman behind the tree for their challenges? I Googled "free checking" and came up with multiple options. I once had very little in my accounts too. If I overdrew my account, I didn't write a tersely worded letter to my congressman. Yet this is how the author chooses to rationalize individual challenges. 

It's the systems fault.

In response to someone overdrawing their checking account, consider the following reactions:

Person 1.  The big bank screwed you! Something must be done!

Person 2.  Ouch! You shouldn't overdraw your account. Let me show you how I avoid doing it.

I ask you: Which person cares more about the long-term well-being of the underbanked?


~ Jeff

Tuesday, June 20, 2017

Why are banks slow to adapt alternative credit data? I'll tell you why!

Deposit insurance. 

In order to get federally sponsored deposit insurance, that is industry self-funded mind you, the Federal government and state governments set up a regulatory scheme to ensure the safety of customer deposits.

All have benefited. The banking system is stable, which is critical to national and state economies. Depositor money is safe. Also critical. And let's not forget about the thousands of employees that work for regulatory bodies, compliance personnel in banks, and consultants that help them comply.

So what am I talking about, that deposit insurance is why banks don't do like FinTech lending firms and use alternatives to the FICO score in underwriting consumer credits? 

Our legislatures did not limit themselves to safety and soundness when they created banking law. No, they dabbled in money laundering, terrorism, drugs, Internet gambling, and, oh yes, fairness.

Fairness.

What does that mean?

Whatever you want it to mean.

So when yesterday's American Banker asked why alternative credit data was a hard sell for small banks, running afoul of the Fair Lending Act was a key concern (see table).


I would argue that using alternative data to make consumer loan decisions scares bankers because it has not played out with the "fairness" laws and regulations out there, and the disparate impact doctrine used by regulators to determine if a practice is discriminatory. 

According to the FDIC, disparate impact occurs when a policy or practice applied equally to all applicants has a disproportionate adverse impact on applicants in a protected group. Even if it serves as a good predictor of a borrowers propensity to pay back the loan. If a financial institution uses payment of utilities in its credit decisions, and declines credit because prospective borrowers pay utilities late, this could have a disparate impact on a protected class. But bankers won't know that when they establish the criteria. They have to find out later, after a bureaucrat in Washington does a white paper.

This application of law will continue to be a challenge for financial institutions looking to compete with FinTech firms and mine other data sources to predict a customer's credit worthiness.

I got news for our lawmakers and regulators. I only know bankers that want customers to pay back their loans. And because deposit insurance is a national program, so should they.


~ Jeff


Tuesday, June 13, 2017

What Can Marc-Andre Fleury Teach Bank Boards?

It's a team sport.

Sure, he's a hockey goalie. I doubt he knows much about banking. Or how good Boards function. But he can teach us that a high performing Board works as a team for their constituencies. For professional athletes, it's for their team, teammates, and town. For bank Boards it's for their shareholders, customers, communities, and employees.

I recently attended the Maryland Bankers' Association annual convention. I attend many sessions for my own knowledge. And for the benefit of clients, and today, my blog readers.

One interesting session was The Importance of Board Composition and Succession to the Future of the Enterprise delivered by Regina Pisa and Matt Dyckman of Goodwin Law. I know. The topic title was a mouthful. Lawyers.

Interesting because an early point they made was that "strategic planning and board composition should be inextricably linked." Provocative because they recommended diversity, but not in the politically correct way, but rather "diversity of skills, knowledge, and viewpoint."

And I say Amen!

Last September I did an analysis of the Board composition of the best and worst ROE banks to see if there was any secret sauce to the best, and a recipe for disaster for the worst.  I could find none. All of the carping over CPAs or former bankers meant nothing to the bank's financial condition or performance. Possibly to the chagrin of regulators who suggest or outright tell banks to put this person or that person on the Board.

What does matter in my opinion, and seemingly the opinion of the good folks of Goodwin Law, was the interaction between Board members and the Board and Management, determines if a Board is high performing or not. Don't take my interpretation of their words. Look at their slides. Lawyers have lots of slides.



This is consistent with my experience.

If you want a high performing Board, consider it as a whole, deliberative body. If the body needs an arm, add an arm. Don't add another leg. This brings me to the other slide I'll swipe from their presentation (with their permission, mind you).


What you want is debate, but not for debate's sake or to hear those type A personalities talk. But debate to ensure management is following policy for safety and soundness. Debate that the Board reports are accurate, timely, and relevant. And debate to hold management accountable for pursuing the bank's strategy. Team players that build the team up and make the Board better.

What you don't want are yes men/women, gripers, or those that pursue self interest above all else. 

Which brings me to Marc-Andre Fleury. Last season he was the Pittsburgh Penguins starting goalie. He got hurt and his replacement did so well he took Fleury's job. This season, Fleury served as the second string goalie although he is very, very good. He stepped in when the other goalie got hurt and delivered two playoff series wins. One against my Capitals!

He never griped. Never brought the team down. In fact, he built the team up when called upon. And his team spirit played a key role in delivering a second straight Stanley Cup to Pittsburgh. 

That's why the Pens general manager called him "the best team player in sports". Because hockey is not an individual sport. It's the team that wins championships.

And so it goes with bank Boards.


~ Jeff