In episode one of a two-part Believe in Banking podcast series on growth, Sean and Gina kick off the new year with a discussion around how financial institutions are increasing their influence to reach more consumers where they are. From the rising momentum around M&A to organic growth and branching, financial institutions are looking to boost their competitive edge by becoming bigger and stronger. In this renewed environment, even new bank formation is on the rise. Their conversation covers the significance of marquis events like Bank Director’s “Acquire or Be Acquired” conference where Adrenaline’s Bethany Lewis will be presenting. Going further, they discuss new data on CEO confidence and its role in driving deals forward in 2024. Finally, they touch on employer brand strategy as a key way to onboard and retain employees and emphasize the importance of rebranding to attract both new customers and talent alike.
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. Here are your Believe in Banking hosts, Sean Keathley and Gina Bleedorn.
Sean Keathley: Welcome to our Believe in Banking podcast. I am Sean Keathley, CEO of Adrenaline.
Gina Bleedorn: And I’m Gina Bleedorn, President of Adrenaline.
Sean Keathley: Well, Gina, happy New Year. Our first podcast of 2024. Why don’t you talk to our listeners about what you are up to at Adrenaline in January to kick off the new year?
Gina Bleedorn: Yeah, well, hard to believe it’s already 2024. We’re four years out from Covid at this point, and continue to experience ramifications of how it changed all of our lives, and certainly how it changed banking. One of those things being that a lot of M&A stalled, but is now going.
And we are looking towards, we think, record years in M&A. Not just in banking but across sectors, especially ramping up into 2025. We’re not sure what 2024 holds for us yet, but all signs point to a lot of activity, and bigger acquisitions as well.
We are attending an event, the only event in banking only focused on M&A. It’s called Acquire or Be Acquired, put on by Bank Director. It’s a wonderful conference. It’s in Phoenix at the end of this month.
And we’re going to be speaking specifically around the due diligence often not done. Because obviously part of M&A, is due diligence. A major part. And that is something that every CEO, and C-suite, and board of directors is anticipating. But we have seen a lack of due diligence surrounding specific areas like branding, and brand implications, and name implications. And understanding even the options of what to do with your brand when faced with M&A challenges and scenarios.
So we are going to be speaking about that.
Sean Keathley: Well, Gina, talk about Bethany Lewis, who is our speaker. Her bio is perfect or Acquire Or Be Acquired. Talk to the audience about Bethany, one of many former bankers we’ve hired at Adrenaline.
Gina Bleedorn: Yeah, Bethany was the former head of marketing at Park National Bank. We had Parks chairman David Troutman on this podcast last year, and Bethany since joined our team. But she dealt with the exact issue she is talking about, which are branding implications in the face of M&A at Park, as they had acquired multiple brands over decades. And assimilated charters, assimilated operations, assimilated products, but let the bank keep their name and their logo and ultimately it was creating far more problems than it was alleviating. And hurting their business, even cannibalizing their business.
So they had to go through an extensive exercise of discovery, and education, and decisioning around what to do with their brand. And ultimately decided to assimilate under one brand, and believe it’s the best decision they’ve ever made at Park. Bethany, as a senior director here at Adrenaline, is going to speak on stage at AOBA, Acquire Or Be Acquired, about this very topic.
Sean Keathley: And Gina, I’m looking forward to that. I think there’s going to be a record attendance. All signs point to this ticking up, as you say. 2023, one of the larger deals, was the Bank of California acquisition of Pacwest Bank Corp. But we really seen it, even said not just in banking, but across all sectors. I think we’ll see increased levels as we get into the third and fourth quarter and roll into 25. Everything we’re seeing by our clients and just what we’re hearing from CEOs supports that.
Gina Bleedorn: American Banker is even reporting new bank formation, which of course we’ve seen very little of in the last decade or, so is something that is expected to rise. There were five new banks that opened their doors last year, and looking to more.
Sean Keathley: We are certainly seeing other activity as well, Gina. Organic branch growth. And so I think that combination of M&A branch growth seeking new markets, new banks, tells you that we were entering a period of the highest levels of CEO competence we’ve seen in the last four years.
Gina Bleedorn: The top five mergers and acquisitions in 2023 were very much focused on companies looking to get bigger and stronger, especially companies flush in cash looking to boost a competitive edge. And as we know, there’s been some capital restraints in banking looking to see, as those lift, what deals we’re going to see come down the pipe.
Sean Keathley: And when we look inward at our business, it really does validate what we’re hearing from our CEOs and just the broader press. The three trends inside of our business at Adrenaline as we enter 2024, one, we have a record number of clients building new branches. Who’d have thought that four years ago?
Number two, we have a record number of, I’ll call them small acquisitions we’re assisting people with. 10-branch systems, 12 branch systems, and a lot of those are not in big metropolitan areas. We’re seeing them in the middle of the country in less-populated areas, and I think people are looking to get smarter.
Talent acquisition, teammates, sometimes is much of the goal in those type of acquisitions. And then we are seeing about a 300% increase in our annual run rate of clients. We are rebranding. We are changing their brand and name because it was limiting their growth. And so all those tell you that people are on the move with confidence, looking for talent, new customers, and growth in new markets.
Gina Bleedorn: And highlighting Sean, within that, as you mentioned, we are certainly seeing it across the board. But there’s some trends specific to credit unions that are worth noting, that the industry is reporting on at large. And we are seeing within our own client base, which tends to reflect the industry at large. They are branching, and growing, and on the move really more than they ever have been.
And in 2024, it happens to be they’re a hundred and 15th year anniversary since the first US credit Union was started. They have generally outpaced most banks, most meaning community-sized banks in compound annual growth rate over the last five years, including through covid. And they are trying to scale up.
And what we have seen as they do, they are growing assets, growing loans, growing savings, growing members faster and more consistently than community banks in some aspects. And we are seeing the most growth and scale in those one billion in assets or larger.
They are also changing lending solutions. They’re getting more creative with payday-type lending, same day type lending in some cases. And as I mentioned, branch building is trending way up. They have been traditionally under-branch, certainly less so than banks, especially regional banks and national banks.
But they are making investments into going into new markets organically as Sean mentioned earlier. And of our branding clients in what our company is seeing, three quarters of them are credit unions.
Sean Keathley: This surge we’re seeing in our own clients that are rebranding, they are looking to reestablish themselves in a more relevant way. Some of them have names that are seg-based geographically limiting, but some of them are just tired and won’t play in the right markets.
And so we are seeing them come up with exciting new identities, new promises, embracing the new generations, the new markets. And one thing we heard for sure, and Gina, you could talk about this Everwise, exciting their staff.
That is something that’s often misunderstood, the power of your entire enterprise, being excited about your brand and your brand promise, and paying that off. And we had the Everwise team, formerly teachers on a podcast, they spoke to that with a lot of enthusiasm.
Gina Bleedorn: They did. And in the case of teachers, obviously the name was incredibly limiting, given less than 15% of their membership over time were at-present, actual teachers. And so that becomes a problem. There’s a couple hundred teachers’ credit unions in the country, that’s also a problem. So name change had to be part of it, but in some cases it doesn’t.
Another example of a similar-size credit union, Tower Federal Credit Union, about 4 billion out of Maryland, they had a great name, Tower. And they didn’t need to change it, but they absolutely needed to establish new relevance and a new brand. And they have an interesting story and challenge that they serve a super select community of US intelligence related to protecting national security, literally employee and families of the NSA and the US cybercom industry, within the Pentagon behind the fence. But they also had to broaden to reach people that are not literally part of the intelligence community, and that was difficult.
Gina Bleedorn: How do we drive growth and connect to the needs of a really select member group, and make it applicable to other people not in that member group? And so we positioned them with a smarter, stronger positioning. We are your Tower, rolled out that brand, a new identity that was a smart shield that represented both innovation, and security, and personalization, and kind of looked like a fingerprint.
And all of that launched with incredible fanfare that changed the culture and the trajectory of growth of this credit union for current members, for current employees, and potential new members that the new brand will now attract.
One of the things, especially in moving into new markets that is so often overlooked or underestimated, is what challenges and hurdles and the uphill battle you face in attracting new audiences because the markets are so cluttered. Landscapes are so cluttered. And so if your brand, even if the name is okay, but the brand itself doesn’t feel compelling or relevant, people will just not notice you, much less choose to do business with you.
Sean Keathley: And Gina, one other thing we know it’ll do, it’ll help attract new talent. That is becoming a currency that’s got more and more value, especially in new markets and just in general.
Talent acquisition is difficult, and much easier to do with a powerful brand that stands for something. And we are seeing that as a number-one concern for executives. Hard to do with a brand that has no energy, or no meaning, or is limiting growth. You’re not going to attract people who want to work there, for sure.
Gina Bleedorn: Yeah, Sean, exactly. Having an employer brand strategy is becoming increasingly important, and arguably is as important as having an external brand strategy. And these types of brands like Everwise, like Tower, did it internally and externally at the same time. And that employer brand strategy really is designed to meet consumers where they are by meeting employees where they are, and thus they can then serve consumers better.
Sean Keathley: Well, exactly. And I remember one thing Dan said from Everwise, “We felt like we had our parking break on.” You’re striving for growth with your parking brake on.
And so that rebrand, unlock that. Gina, you mentioned consumers and tapping new consumers. Talk about what’s going on with consumers, and talk about different generations of consumers and how this impacts them.
Gina Bleedorn: Yeah, studies continue to come out about generational cohorts. But I’ll mention too, that we’re seeing more and more financial institutions focus on life stage banking, not just generational banking, and that is allowing them to serve the needs of people wherever they are in their life.
Someone that’s 65 and 25 could be financially going through buying a house for the first time, or going through the same thing. So there is a lot more of that happening.
Outro: You’ve been listening to Believe in Banking, a podcast series created to empower decision-makers, influencers, and industry leaders in financial services. Be sure to also join us on our flagship site, believeinbanking.com.