Bank CEOs sometime have a reputation for leading boring lives. These two bank CEOs survived life threatening situations that resulted in a new business focus that has led both their banks to greater success.
Brent Beardall, President, CEO and Vice Chairman of WaFd Bank
Brent Beardall is the President, Chief Executive Officer and Vice Chairman of WaFd Inc., NASDAQ:WAFD.
Mr. Beardall joined WaFd in 2001 as Vice President & Controller. In 2003, he was promoted to Chief Financial Officer, a position he served in for 11 years prior to being assigned to his current role with responsibility for all client-facing activities of the bank.
He was awarded the title of President in 2016. On April 1, 2017, he became only the sixth CEO in the bank’s 100 year history.
In January 2022, Mr. Beardall was appointed Vice Chairman of the Board.
I want employees that have heart, that care about others.
And I want to be a bank with heart. I want to help out, and that’s really what a bank is about — to be able to help.
What we found is, if you give someone a chance, 90%-plus of the time they will pay you back and they will be customers for life.
It’s really easy to make a loan to someone that’s absolutely qualified.
Everybody will make a loan to them.
It’s making loans to people that are right on that edge of if they’re qualified or not.
But that’s the loan that’s really going to make the difference.
And you look at what we’ve done in this country from a financial institution standpoint, we’ve really closed our doors to the most needy, and so, OK, go ahead and do your banking outside of the regulatory financial institutions.
So that they’re going to the payday lenders.
Think about how hard it is to get ahead when you’re paying 20% interest.
It’s impossible.
And so, what I want to do is be that bank with heart and open up to people that wouldn’t normally bank with us.”
Brent Beardall recognizes that a bank must be more than a simple mortgage lender.
“…A mortgage loan, a 30-year fixed rate mortgage loan is a unique instrument.
It has what’s known as negative convexity, meaning it is never worth more than the day you book it.
And you’re like, why is it that rates go up, it goes down in value; rates go down, it goes down.
It’s never worth more.
It will stay the same.
That’s because if rates go up, the value goes down because you are now earning a below market interest rate.
So, all of a sudden, they’re going to extend, just like it’s happened today — everybody with their 4% mortgages.
So, it’s less valuable to the bank when rates go up because you’re now underwater in terms of what you could earn on that.
And then what happens on the downside is, historically, if rates went down, nobody really paid attention to it.
I’m happy with my mortgage, I can pay it.
But now with technology, oh, my goodness, your rate is now a quarter of a percent higher than what the market is.
I can let you click on this one button and I can refinance you with very little paperwork, and it’s going to save you, you name it, $200 a month.
And so now all of a sudden, the bank that made the mortgage — that mortgage is gone because it’s paid off and gone somewhere else.
So that’s what I meant about technology, and primarily cell phones, because it’s so easy.
And it is really artificial intelligence; once artificial intelligence really kicks in, they’re going to say, OK, hey, Brent, here’s one button, you can choose which of the five mortgages you want.
So why would you want to be in that business where if rates go up, you’re stuck with something you don’t want, and if rates go down, it just converts to cash.”
John Hairston, President and CEO, Hancock Whitney
John M. Hairston is President and Chief Executive Officer of Hancock Whitney, NASDAQ: HWC.
Mr. Hairston has served as CEO of the company and the bank since 2008, and President of the company since 2014.
Prior to becoming President, he served as its Chief Operating Officer from 2008 to 2014.
Mr. Hairston served on the board of directors and was a faculty member of the Graduate School of Banking at Louisiana State University in Baton Rouge, Louisiana, and at the Georgia Banking School in Athens, Georgia.
He also currently serves on the boards of directors of the Gulf Coast Business Council, New Orleans Business Council, Mississippi Economic Council, and The National WWII Museum.
“…The real catalyst for somewhat of a hockey stick growth curve really occurred following Hurricane Katrina. Our organization — and I have to give credit immensely to each of our team members during that time — really exhibited heroic efforts to reopen the organization very quickly, faster than most of our competitors.
In many cases, we had facilities that had been leveled — where there was nothing left but a slab.
And our associates stood up trailers, folding tables, motor homes that had missing windows and windshields, whatever we could get to serve the community in the absence of a lot of banks.
In doing so, that created a fairly massive trajectory of growth.
In fact, the first 105 years took us to $3 billion; then over the next 20 years, to $35 billion.
The catalyst for that really was the aftermath of Hurricane Katrina, which was as difficult a time as our region had seen.
It presented a great deal of economic growth, and we were very fortunate to participate in that rather heavily.
From there, very rapid organic and inorganic growth took us to the $35 billion in assets we have today.
Along the way — and this is somewhat cultural because of our focus on strength and stability — the organization has been remarkably stable.
We haven’t had a dividend decrease since 1967 — nearly 60 years — and have been rated by BauerFinancial, Inc. as one of America’s strongest and safest banks for 143 consecutive quarters, which is almost 36 years in a row.
Despite all the growth and the interesting periods in our economy from the 1970s through today, the company has been remarkably stable and successful.”
The FDIC has recently been dramatically downsized but John Hairston has handled this regulatory change in stride.
“I presume that you recognize that we’re an FDIC chartered bank.
We have a State of Mississippi charter, because that’s the state in which we’re headquartered.
Then, we have an FDIC obligation.
We also have a holding company that owns our bank which is regulated by the Federal Reserve.
With the FDIC, I’ve been impressed so far with the ability of the organization to roll with the downsizing of the organization.
Every organization from time to time goes through a belt-tightening or a downsizing.
We’ve been through it several times in our existence.
We always come out the other side in better shape than when we enter it.
I expect the FDIC is going to do the same.
So far, we’ve seen no degradation whatsoever in the quality of exams.
We, as a midsize bank, are under what’s called a continuous exam process; we have exams going on all the time.
There were the days of having the FDIC show up for two or three months a year and leave.
When we crossed $10 billion, that all went away.
We have a couple of dozen exams throughout the year.
There’s always an exam going on, on some area of the company.
We’ve seen zero degradation in the quality of the examination staff, in the thoroughness of the exams, the quality of the questions, and the timeliness of the exam results.
If anything, we’ve been getting results back faster.
We’ve really seen no apparent degradation in the quality of the work that they’re doing.”
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