Conversations Shaping the Next Chapter of Banking

Text Transcription

Intro: This is Believe in Banking, a podcast series for decision makers, influencers, and leaders, featuring experts taking on the financial industry’s most pressing issues with insight and empathy. The podcast features information and conversations designed to enlighten and empower. 

Gina Bleedorn (00:17): Welcome to our Believe in Banking podcast. I’m Gina Bleedorn, President and CEO of Adrenaline.  

Juliet D’Ambrosio (00:24): And I’m Juliet D’Ambrosio, Chief Experience Officer at Adrenaline. 

We are closing out the year of 2025 and closing out the year on the Believe in Banking podcast. It’s a great opportunity and really a joy for us to revisit some of the best and most powerful conversations that we’ve had with banking leaders across the industry and across the country.  

We’ve been in conversation with all of these inspirational leaders and discussed everything from institutional transformation strategies for growth – what else? – centering brand values and of course the evolving role of the branch in people’s financial lives. It continues to surprise and amaze this episode brings together some of these best, most illuminating insights from the people who are shaping the future of financial services. 

So, we’re going to hear from Al Dominick. He’s a Partner with Cornerstone Advisors, and he shares some of the forces that are accelerating M&A in banking and the factors that are driving that need for scale. 

We’ll hear from Jevonne McLaughlin. She’s the Vice President of Brand Marketing at East Rise Credit Union, and she talks about building trust during a merger of equals and the holistic process behind choosing their beautiful new name. 

Nick Mentel, our very own Managing Director of Insights & Analytics here at Adrenaline, addresses the economics driving network growth and why the branch still anchors long-term banking relationships. 

None other than Jeffrey Martinez, Executive Vice President and Head of Branch Banking at PNC, who talks about how to humanize branch banking and deliver consistency at scale and otherwise just bringing the enthusiasm and passion behind banking. 

Courtney Coss, who’s the Chief Retail Officer at the Credit Union of Texas, shares how CUTX meets members where they are and then builds culture and community through future focus retail delivery. 

And most recently Sherry Bear, Chief Administrative Officer at Civic Federal Credit Union, described designing branch spaces around hospitality and empowerment and how the credit union was able to lead meaningful change by leaning on their organizational values taken together. 

These leaders just offer the most clear-eyed, optimistic, powerful look at the strategies that are shaping the next chapter of banking. We hope that you’re as inspired as we are by some of these trailblazers who are leading change in our evolving industry.  

So, please enjoy our year end special guest episode of the Believe in Banking podcast. 

 

Al Dominick (03:20): We should probably talk what’s happening in the M&A space at the moment. I was pulling some stats for the year, and we’ve seen over a hundred bank deals with an aggregate value of more than $14 billion announced in 2024. And this is all coming from our friends at S&P Global Market Intelligence. But you think about that $14 billion number in comparison to last year where it was just $4 billion worth of transactions announced. And that’s important to think about when you take a step back and consider how the financial and really the banking industry has been created over the last 20-25 years. It’s really product of consolidation, and so people talk about consolidation waves and when they are going to hit or when they’re going to maybe ebb out. 

It strikes me that right now you’ve got a number of regional and community banks really thinking about whether it’s time to partner up to address some commercial real estate challenges – the constant drumbeat for tech investment. Again, how do you try to create some type of size and scale that allows you in some way, shape, or form to differentiate yourself from the mega banks like a JP Morgan, B of A, US bank that have been doing some pretty impressive investment in their own organizations. So, when I think about what’s taking place in the M&A sector, those are some numbers that come up. I know you all also work with credit unions as does Cornerstone. So, I took a quick look at this. It looks like assets sold and mergers between credit unions have nearly tripled in 2024. And so that growth stands to continue as we look at the credit union market consolidation trends for what we think is the next few years. 

Al Dominick (04:56): Banks are sold, they’re not bought. So, depending on the size of your bank, talking to a credit union is just a non-starter. If you think about some of the deals that have been recently announced, I would be hard pressed to think there was any conversation about selling to a credit union. There’s only a handful, if not just maybe two or three that could financially even look at them and think they’re in the playing field. So, I think we have to first start by thinking credit unions buying banks is probably on the small end of the sector. Banks less than 500 million in asset size might be attractive in some cases to a credit union. 

And culturally that’s where it becomes so important to be honest, to figure out how long your future appears to be? Does it make sense to cash out because a credit union’s going to pay in cash? What’s your internal team look like? Do you have succession plans in? Do you feel like you have some type of compelling argument to stay relevant to the market that you’re serving? So, the bank might look and say, “I’m not super keen on some of the tax loopholes that credit unions are able to utilize, but I appreciate and respect maybe their retail banking focus, and it could complement our commercial side.” 

But again, it starts with an honest assessment from the bank standpoint. Would you want to sell to a credit union? Then you have to take it to the flip side: would a credit union want to buy a bank? Because there’s cultural concerns that exist in a credit union, as well. If they’re thinking about serving their members, they’re not going to be driven in the same way that a bank that’s thinking about if its shareholders will be prepared to. So, it’s a slippery slope and it’s one that starts with the basic blocking and tackling of banks don’t like credit unions and credit unions don’t like banks, but when you strip away that easy narrative, you realize it becomes a far more nuanced conversation. 

Al Dominick (06:28): Think about an acquisition where a merger [is] about brand and brand development and how do you have that right identity going forward? I’ve been at various companies. I’ve led three corporate rebrands, and so I’ve learned the hard way that if you’re not using data to drive your decisions, you’re just aggregating a series of individual opinions. When I think about how does an organization benchmark who they are, what they are, what they want to be seen as, their values, their visions, how do they become the magnet for talent that everyone talks about, but far fewer actually able to deliver upon? Brand becomes really a big part. And so, on the M&A integration end, a deal gets announced. You have legal day one, you’ve got to look ahead to legal day 100 if you will. 

There’s a lot of data that underpins what goes on during that period of time, whether it’s around the contracts that you’ve had that need to be negotiated or systems that might be redundant. There’s a lot of hard data that can start to show up, but then you also have to tease out what’s your identity, what’s your brand, what are you known for as a new organization? And not just an amalgamation of two former businesses.  

Jevonne McLaughlin (08:51): We really focused on helping the Vermont State Employees Credit Union membership, those who were going to vote on the benefits to this merger of equals, and coming together and what it meant for future generations of Vermonters and our members and that long-term stability and the opportunities with offerings. So, it was very much focused on the ‘why.’ Some complexities with that were that we didn’t have all the answers yet. While we were trying to bring that messaging and those communications down to something tangible, it was incredibly challenging to communicate that vision in a way that felt like we would follow through on that and that the members would truly benefit. 

When we got to the vote, that was actually a separate campaign. So, we did about 3-6 months of awareness to our members to bring them into the conversation, prepare them with information so that they could participate in the vote. And then that second campaign when we dropped all of the voting materials, was not asking for the members to vote “Yes,’ but asking them to participate. So, participation in that vote was going to be absolutely critical in getting that vote to pass. And as Yvonne noted, we were successful in that. 

I think this is one of the most critical steps in our process because to your point, Gina, this was really early on, and we needed buy-in internally amongst the leadership and some of our key marketing professionals that a new name and taking that path was where we needed to go. We did an entire valuation from market research to some member surveys. We did internal surveys throughout the org, evaluated all – we had three legacy brands at the time – all of the branding materials, the strategic approach. Then we had an assessment and a recommendation where we reviewed everything. And ultimately, and this was incredibly helpful in aligning and creating that buy-in to take that journey to a new identity and name, that discovery process confirmed that we absolutely needed a new name for future growth. 

There were limitations to both of our legacy names geographically. They weren’t overly inclusive. A new name would showcase this combined mission and purpose that we didn’t have yet. And I think ultimately what really created that buy-in and this confidence in moving forward was that a new name would truly reflect that this was a merger of equals that was going to be really important for our membership to see an experience and create a lot of opportunities for the vision of this new org. So it would be not only just a new name, but this research that we did very much told us that this was going to be a new entity as well. 

Jevonne McLaughlin (11:47): We had established the brand strategy at this point, and the name was kind of like that first tangible, audible, concrete thing that was going to come from the brand strategy. So, it was pretty emotional seeing the names. And of course Adrenaline was very good at reminding us of this, that the name is only one piece of the brand identity.  But of course, we’re going through these table stakes and strategically these critical items like availability, which is its own animal in terms of domains. I think what I recall, even though we had these boxes and not every box was going to be checked, we didn’t want to default to legacy brands with the name. We wanted to make sure that that name would differentiate us, but not get too creative, so that it wasn’t understandable.   

In referencing the region, because a lot of the data that we had, and of course Vermont has its own unique brand, which adds just another level of complexity to brands within Vermont is just so special and powerful, but we didn’t want to be limited regionally like our legacy names had been. We still wanted to nod to our region because our roots were so important to our existing members. And I think we were looking at being inclusive and accessible and not limiting, easy to pronounce. We were just not going to get into a situation with any sort of acronyms again.   

After several rounds of deliberation internally with our team, we had I think three to five in the end that we were pretty torn on, and EastRise actually made it through all of the rounds. It was in the first round, and made it all the way through. And I think for me and some others, what really turned us to decide on EastRise was it just encompassed the spirit of the new brand so well. And that name has so much meaning that ties back into that brand strategy and our identity, and I think that’s what really surfaced that name to the top.  

Nick Mentel (13:54): Let’s start with the bad news. The closures themselves in branch teller transactions are down. Utilization of the branch itself has declined and that certainly varies by market, it varies by institution, but that certainly is an undeniable trend. And given that personnel and occupancy expenses are by far the two largest non-interest expenses for any institution, that’s where the money is spent and that’s where an institution can save if they’re not getting the utilization out of that branch. However, for all the hand wringing over a drastically evolving business model, the network effect is still an undeniable predictor of market level success.  

And let me take a step back and really explain the network effect. It is perceived convenience as an institution, perceived brand and branch ubiquity when a customer or a member or more importantly a prospective customer is considering their options, they will lean into convenience wherever there is an institution that has convenience and access in terms of physical outlets will psychologically play an important role in that decision making process. Really, this research has not wavered much in decades. We do tend to see outsized marginal returns from a deposit share perspective when that institution achieves typically six to 8% branch share. And we are fond of saying that no one wants to use a branch, but everyone wants one nearby. 

We work big to small, so we’ll ask several questions. What are the MSAs with opportunity? What submarkets within those metropolitan areas demonstrate opportunity indicators and what sites within those submarkets hold the highest potential? So, we get fairly granular from a real estate perspective, as well. We’ll look at population migration trends, commute patterns, mobility data, etc. Then at a micro level, a thorough understanding of real estate nuances, design implications, both from a zoning and a construction perspective, but also from a peacocking perspective, and a brand expression perspective. Ultimately with the goal of bringing this roadmap to life with appropriate hiring, marketing, design, all of the other elements that are admittedly just as important as picking the right market to grow. 

Jeffrey Martinez (16:09): The one thing that I said and I thought hopefully really resonated across the gamut of financial institutions both, again large [and] small, is winning in your geography. So, as people chase potentially a different MSA, I’ve kind of tried to message around like, ‘Are you winning in your zip code?’ If you’re not winning in that zip code, how does another zip code change that? What tweaks, pivots talent decisions do you have to make that then something becomes scalable and replicable. New isn’t the catalyst for change, but it’s more of an acceleration of your existing model. You can go faster as you continue to deploy more resources and new locations, but it isn’t a dynamic change.   

I think there’s a lot in what I would say the recent past that tells us a lot of our ability to execute going forward and that just new and this kind of understanding what will new do again – new product, new branch, new talent, new resources – that isn’t necessarily pointing to a differentiating outcome going forward, then that’s where leadership steps in and figures out the communication, the strategy, the deployment, and the execution. So, whatever is new truly is then that is a catalyst for accelerated performance.  

I think everyone, regardless of age or generation, when I am interacted early on in a meaningful way, simple things that I’m sure, Juliet, we’ve heard on this call for ages that in this industry, maybe because of this path towards digital has been so diluted that we forgot the basics. We forgot how to humanize in an assumption that Gen Alpha or Gen Z or even Millennials want to come in texting you. Yes, there’s parts of convenience that are needed, but you’ll find if someone is choosing to walk into your branch, they’re choosing people. And you have to define that and unpack that around this choice for humanity. What else comes after that? Because I’m now interested in your advice, you’re more willing to go down this financial journey with someone that can wow you on the small things because you can embed a level of trust, confidence, and comfort through hospitality.  

Jeffrey Martinez (18:08): How does that then, through what we know is a choice for a humanized level of service or some more sophisticated advice that we lean in more on people by also then enabling some of the digital features that’ll make the use of those much more applicable and much more easy. But people are walking in for people under a brand that they’ve grown and trust, and I want to wow them in a way that instead of choosing to run through something fast – they have one more question, they have one more thought, or they want to schedule one more visit.  

I always say new does not fix broken, and I think on many is this idea that new will fix things, new will drive that added revenue, new will drive more engagement. [People think] a new branch will drive better revenue than our existing network. Question is why if there’s already a bedrock or understanding of momentum, acceleration, and engagement where the team deploys today’s resources, and I use that as a better understanding of how is my next thing going to launch? And so that’s a good kind of strategic view to do it.   

Jeffrey Martinez (19:15): Outside of, again, falling in love with an industry that’s centered around helping clients achieve something that either they know want to achieve or don’t know it yet have been some of the most rewarding conversations I’ve ever been down to the client level as a teller trying to figure out how can I help and refer to a banker, as a banker learning, being curious, being empathetic, and to a manager at any scale, looking to scale that broadly because I know help and passion can extend beyond one physical site, beyond one city, beyond one state, and really, again, sitting today driving that in the coast to coast franchise. But I’d probably say the one example, and it has happened often, but there’s one in particular and probably my first role as a branch manager hiring a banker, and as we’re all about financial wellness, but a lot of that is even shared with our own team.  

I not only educate clients, I educate our people all the time as there’s nothing better than seeing an employee contribute to their 401(k) for the first time, know that PNC has a pension, buy their first car, save their first thousand dollars, get into their home. And I remember this one banker who for years always you knew was going to be a tremendous success and had found themselves becoming a branch manager in their own career and they continue to be a tremendous success here at PNC. And I remember she stopped me and said, “Jeff, you don’t understand the impact you’ve had in my life.” And I said, “Well, thank you.” And again, I’m probably more centered around career and advice. And I’m like, “Yeah, no, hey, thank you again. I’m just a fly on the wall watching greatness happen.” And she’s like, “No, because of you and your guidance, I bought my first as a single mother for my two kids.”  

And [it’s] those conversations, if they don’t give you goosebumps or tingle, some heartstrings and you say, how do I do this more faster, broader? That’s the story of retail banking because we are a catalyst to change lives. My kids now my daughter, who will be 21 in two weeks, and my son as early on, I’d say, “What is daddy going to go do?” And she’d say, “Changing lives.” And I said, you’re absolutely right. And so it sounds cliche-ish, but it’s true. And we do it at multiple levels. But that always resounds in me, and I take that to heart, and it’s why I wake up every day. I may lose a little bit of sleep, but I wake up every morning more pumped because there’s stories like that out there waiting to be created – all in the backs of a great manager, a great banker, curious about helping somebody.  

Courtney Coss (21:49): It is a delicate balance. We realize that investing in new branch locations is a huge investment, but we also know that that will bring substantial membership growth. We also have a community engagement department that we invest in. We really believe in it. Again, that’s who we are here at the credit union. And in each of these markets, even where we have existing branch locations, we have community engagement officers that their whole job is to get involved with the community and understand what those community needs are. So again, at the end of the day, that is our culture and that is who we are, and we’re also able to measure our impact in communities by our involvement.  

We’ve been very intentional with some of the branch locations. In some of the ground-up locations, we have the space for a community room or if it’s a tenant fit out location that’s surrounded by a lot of local businesses, we have incorporated those community rooms because a lot of these restaurants or other businesses don’t have that space. And so we’re in the people business and we want to make sure we understand the needs of our community.   

So, we partnered with a lot of those businesses and just said, “Hey, if you guys ever need a meeting space, you want to meet with your staff or if you’re meeting with anyone else, feel welcome to reach out to the credit union. You can use our space.” And they are getting used. We actually even have a community center at one of our branch locations, and it’s because this is again out in a rural area where the community just does not have a meeting space for businesses, for the education, for the schools, or even just the community, if they want to rent the room out. 

And so we had enough space on the property that we purchased that we thought, “You know what? We’re going to incorporate a community room where the community can come and gather no matter what that event might be.” And that particular location is constantly booked months in advance. So that’s been very successful for us, and we kind of filled a gap that was there in that community, which was great.   

Courtney Coss (23:51): I would say stand out and get creative. Really in today’s competitive market, it’s essential to just continually adapt and evolve based on the needs and preferences of your members and your community. Your branch footprint should really be a space that the community wants to visit, and most importantly, you’ve got to keep the personal touch. I think that that’s critical to building those long lasting relationships with your membership. And then the other piece to that would be evaluate your branches. Are they in a good location and are they profitable?  

Well, again, the younger generations, they want to move money and want to move it quickly and without friction. We’ve also found they want to be a part of an institution that does get involved and they make a positive difference in the world, which we’re doing. That really closely aligns with our strategy. And then one of the things that we’re also doing is we have smart branch locations that are inside of high schools here in Texas, and these branches are run completely by students. By doing that, we get to hear firsthand some of the products and services they like and what they’re looking for in the future, and I think that that’s how we tap into that market. 

Sherry Bear (25:02) With the design, we wanted to look at a combination of service and hospitality because the hospitality element, I believe it was Maya Angelou who said, “You might not remember the words someone used, but you’ll always remember how they made you feel.” 

Juliet D’Ambrosio (25:18): Yes, I love that quote. 

Sherry Bear (25:19): I do, too. And it’s so true because when you think about it yourself, how something someone made you feel or something you experience, and so that’s how those branches, the concept is built when right now we are transforming, like I said in June and July, these functioned as traditional branches. We had lines out of the door, I mean just numerous people coming in looking for the teller line and they functioned like that. 

So now we have to make sure our staff that was there during that time period also starts to now transition to the real concept of what the branches are. We have currently over the last couple of months, myself and a couple of other folks have been going across the state, and we set up member events where members could come. We talk to them about challenges that we’ve had, things that we are working on that we maybe we have not done well, what we’re fixing, and they have chance to answer questions, but our next round of what we do will be in our branches. 

Sherry Bear (26:19): These branches are for our members to come to. So we will be there inviting them in, because this is one thing we heard from our members is, “I want to use the digital and the technology, but I’m not comfortable with it. I don’t feel like I know how to use it.” Well, that’s what our branches are there for. So, we are setting up will be after the first of the year doing these events, letting our members know, “Come by the branch. We’re here.” 

That way we actually start moving into more of that community center and having more events with our partners in these branches going out into the community. When I say community, I mean our community of local government, because we’re not community chartered. We serve local government, but local government is everywhere. And that’s how we are looking at this as a time for us now to invite people to the branch and invite them for another reason besides doing a transaction. 

Sherry Bear (28:04): One of the key things is you just got to pick the right people. Whether or not it’s dedication, commitment, creativity, leadership, the mission is important to them. Whatever those components are, pick the right team who can mesh together, that don’t second guess each other, because you can’t do this without multiple teams being involved. We had our core group and then multiple teams will get involved and they’re not doing it day in and day out, and it’s harder for them to jump from a traditional model into what we were building. So you have to jump on that early, you got to know who your members are. 

I’ll say for us, it doesn’t seem like with local government as a membership that you would be thinking these are really progressive groups, but they actually are. When we look at, in particular in North Carolina, types of energies that they’re using, solar, electric vehicles, thermal. They’re building government buildings, their local government buildings using thermal, and they’re looking at affordable housing. They are looking at North Carolina being a fast-growing state, which means local government has to grow, but the young people are not picking it as a career choice. So how do you get people interested in it as a career choice?  

And there’s a lot of pressure on local government employees to deliver, and we ultimately want to be a part of that. How can we be a part of getting people interested in that career choice? How do we have our values similar to them, like the sustainable energy? We feel like we won the lottery with the ecosystem that we’re a part of with local government. It’s exciting. It’s exciting for us, and we love being able to serve in that group, especially because they’re the ones that serve our communities. 

Outro: You’ve been listening to Believe in Banking, a podcast series created to empower decision makers, influencers, and industry leaders in financial services. 

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