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Jim McAlpin featured on ‘Bank Director’

Due to ongoing changes in the banking industry — from demographic shifts to the drive to digital — it’s never been more important for bank boards to get proactive about strategy. James McAlpin Jr., a partner at Bryan Cave Leighton Paisner and global leader of the firm’s banking practice group, shares his point of view on three key themes explored in the 2021 Governance Best Practices Survey.

  • Taking the Lead on Strategic Discussions
  • Making Meetings More Productive
  • The Three C’s Every Director Should Possess
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BCLP Sponsors Banking Governance Best Practices Survey

Bryan Cave Leighton Paisner was pleased to sponsor the 2021 Governance Best Practices Survey, conducted by Bank Director. BCLP Partner Jim McAlpin worked with Bank Director in framing the questions for the national survey and interpreting the results. Bank Director shared the results May 10, and featured the results in their weekly newsletter, The Slant. An article on the survey and related topics will be published byBank Director this summer.

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Conversations about Banking: An Interview with Greg Morse

This month we continue our “Conversations about Banking” series. The series will consist of video conversations with leaders and influencers in the banking industry about topics of current interest. We hope you will enjoy and find benefit in this new aspect of BankBCLP.

In this session of Conversations about Banking  Jim McAlpin speaks with Greg Morse, CEO of Worthington National Bank in Ft. Worth, Texas. Worthington National is a business oriented bank serving the Ft. Worth and Arlington, Texas communities. Greg is a native Texan who is as comfortable in a saddle as he is in a board room, and his observations about banking are both pragmatic and insightful. During the conversation Greg also describes the community outreach that is at the core of his bank’s culture, including financial literacy education for those in need. Please join us for this enjoyable 25 minute discussion.

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Conversations about Banking: An Interview with Jon Winick

This month we continue our “Conversations about Banking” series. The series will consist of video conversations with leaders and influencers in the banking industry about topics of current interest. We hope you will enjoy and find benefit in this new aspect of BankBCLP.

In this session of Conversations about Banking, Jim McAlpin speaks with Jon Winick, CEO of Chicago based Clark Street Capital. Jon is also the editor and main contributor to the BAN Reports, a widely read banking industry newsletter. During our conversation, Jon shares his candid observations on a wide range of trends and developments impacting the financial services industry. This is a quick paced and entertaining 30 minute video discussion.

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Conversations about Banking: An Interview with Bill Easterlin

This month we continue our “Conversations about Banking” series. The series will consist of video conversations with leaders and influencers in the banking industry about topics of current interest. We hope you will enjoy and find benefit in this new aspect of BankBCLP.

In this second installment of our new “Conversations about Banking” series Banking group partner Jim McAlpin speaks with Bill Easterlin, CEO and President of Queensborough National Bank & Trust Co. Bill is the fourth generation leader of a $1.5 billion family owned bank in eastern Georgia.

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Conversations about Banking: An Interview with Bobby Nix

This month we begin a new series “Conversations about Banking.” The series will consist of video conversations with leaders and influencers in the banking industry about topics of current interest. We hope you will enjoy and find benefit in this new aspect of BankBCLP.

In the first installment of “Conversations about Banking” our partner and Banking practice group leader Jim McAlpin speaks with Philadelphia based entrepreneur Bobby Nix. Mr. Nix has served on the boards of several community banks over the past four decades. As an African American he has a perspective on diversity within banks and bank boards that is timely to hear within our industry. As a successful entrepreneur he is also a champion of the positive impact that community banks can have on small businesses. Mr. Nix currently serves as the chair of the Loan Committee and the ALCO Committee of Hyperion Bank, which has offices in Philadelphia and Atlanta.  

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2020 Governance Best Practices Survey

2020 Governance Best Practices Survey

October 15, 2020

Authored by: Jim McAlpin

Bryan Cave Leighton Paisner was pleased to partner with Bank Director on their first annual Governance Best Practices Survey. In my work with boards of directors over the years I’ve found that the most effective tool can be reference to what other well run companies are doing. Best practices are important in every industry, but of particular importance in the banking industry. I believe the information in this year’s survey results will be very helpful to bank boards across the U.S.

The survey focused on the areas of process, independence, oversight, composition and refreshment. You will find from reading the survey results that there is a range of approach In the banking industry to certain key aspects of board governance. For example, not all bank boards have executive committees and among those which do there is not a uniform approach to the committee’s functioning. There is also divergence of approach in whether the CEO also serves as the board chair. I tend to think that a lack of uniformity of approach in the industry is healthy. I am skeptical of those who advocate for rigid adherence to “best practices” in board governance but I agree that practices which have been effective for others can serve as a guide. 

Boards are groups of people, and no two groups of people function in the same way. In my experience, the fundamental building block of an effective board Is careful selection of directors to fill roles within a board. It’s not unlike how the best coaches recruit  for talent based on specific needs of the team. Too often I see board rooms with essentially the same director sitting in all of the seats. Differences in business experience, life experience and perspective among directors can greatly benefit the quality of the board’s collective insight and decision making. 

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Lessons for Community Bank Boards from the Great Recession to Apply in the Pandemic

In March, I dialed into the first ever “conference call only” meeting of a 14 year old community bank. The main office of the bank is located in Philadelphia and there was growing concern about the rapidly increasing number of Coronavirus cases in New York and New Jersey, and the spread of new cases into eastern Pennsylvania. I recalled that our board had reviewed an updated version of the bank’s pandemic policy in December but I couldn’t remember the details. Suddenly that policy had relevance in a way I could never have imagined. In April, our board held its second conference call only meeting, and we are likely to continue that pattern for several more months.

We are all aware of the circumstances that led to pandemic policies being retrieved from file folders and read with interest for the first time.  What we don’t yet know is how severe the resulting economic shock will be, and the degree to which loan portfolios of community banks will be adversely impacted.  It is clear, however, that the adverse impact on small to medium sized businesses across the U.S. has been considerable. As the CEO of one of our law firm’s bank clients in the Southwest recently remarked, we are experiencing the first ever government imposed recession.

God willing, the banking industry will remain strong and be a source of support for the nation’s economy as we recover from the onslaught of COVID-19.  In that context, the boards of community banks could benefit from recalling some hard learned lessons from the recent Great Recession. 

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In Praise of Community and Regional Banks

Last week my partner Rob Klingler posted an impassioned plea to the SBA and bank regulators to allow banks with less than 500 employees to be borrowers under the Paycheck Protection Program, or PPP as it has become known. Rob joined a chorus of voices across the country pointing out that community banks are small businesses too, and if the jobs of employees at a community bank can be saved isn’t that as helpful to the economy as any other small business? Unfortunately, the overhang of TARP appears to continue to cloud decisions in Washington and banks were excluded from receiving loans under the PPP. Irony drips from that decision. At the beginning of the last financial crisis, when the business fortunes of some of the largest banks appeared at risk, Washington rushed to their aid with TARP. Now, at the beginning of a financial crisis that is hitting small business hard, community banks are being told they are the only small businesses in America which must soldier on without government financial assistance.

In that context, isn’t it remarkable that small and mid-sized businesses across the country are flocking to community and regional banks for responsive assistance in the PPP process? My practice has always been a mix of corporate finance and advisory work for middle market businesses and consulting and board advisory work for banks. I like the balance and the perspective that mix brings. Over the past two weeks this view into two worlds has revealed to me the true nature of relationship banking, and the absolute commitment to that concept at most community and regional banks. My clients and contacts in the middle market business world have been frequently asking for updates on the roll out of the PPP program. That was understandable and to be expected. What I did not expect was the volume of calls I’ve been receiving for referrals to smaller banks from customers of large banks. Those calls often begin with expressions of frustration at the inability to get anyone from the larger bank on a call or even to respond to an email regarding the PPP process, and that the most frequent communication received is “you need to visit our website for assistance.” In an environment where hundreds of thousands and likely millions of small to medium sized businesses across the country are suddenly struggling, and with no sense of the near term path, it really matters to the persons running those businesses that they receive support, encouragement and, if possible, assistance from their bankers. It is in the difficult times when relationship banking really matters, not the boom times.

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Bank Directors Should Not Personally Approve Loans

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Partners Jim McAlpin and Ken Achenbach joined me in the podcast studio to discuss the common community bank practice of having boards of directors approve particular loans.

While our initial approach was going to be to engage in a debate on the merits of this practice, none of us ultimately wanted to take the side of justifying the practice; for different reasons, many of which are expressed on the podcast, we all believe that it is a bad idea for bank directors to personally approve loans.

The spark that started this podcast episode was the recent BankDirector piece titled “77 Percent of Bank Boards Approve Loans. Is That a Mistake?” As I’ve written previously on BankBCLP.com, bank directors should not be approving individual loans, and banks should not be asking their directors to approve individual loans.

In addition to the podcast and the blog post, we also have a white paper titled Why Your Board Should Stop Approving Individual Loans.  That white paper analyzes what the board’s role should be in overseeing the bank, and why approving individual loans threatens this oversight. If boards keep approving loans, we’re next going to have to look into how to address our concerns via Instagram, courrier pigeon, or smoke signals.

During the podcast, I also mention our efforts to make the FDIC “podcast” on the financial crisis more accessible.

Please click to subscribe to the feed on iTunes, Android, Email or MyCast. It is also now available in the iTunes and Google Play searchable podcast directories.

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