Once Upon A Time: How An Examiner’s Enlightened Words Turned This Bank Around

Bank Culture

Once upon a time there was a bank that was close to failure. It used to be a great bank with branches filled with vibrant customers and earnings as thick as Kansas soil. However, over time customers moved on and the staff started to feel that they had little to offer compared to the largest of banks. This was a bank that was dying a slow death.


At their next examination, the Examiner-in-charge gathered senior management to discuss the Bank’s problems. In almost every area, the bank had lost its way. Credit was deteriorating, loan growth turned negative, asset-liability assumptions were wrong and compliance was in shambles. During the entire exam, the Bank’s staff blamed the low-interest rate environment, changing technology, competition on deposits, loans as a commodity and operating cost that was too high. The staff felt like they had nowhere to turn.


At the exit meeting, management broke down exacerbated and pleaded to the Examiner-in-charge for help. “I feel your pain,” said the examiner, “I see this often.  Banking is difficult and it is a true grind. Banks struggle and put $70 million dollars of loans on, yet $70 million runs off. Branches are like libraries, as customers don’t have the same needs they once did. Few come into cash checks, deposit payroll or withdrawal money.“ Management agreed and started to reminisce with the Examiner about how banking used to be. As the hours past, the time came for the examiners to leave and the CEO walked the examination team out. As they were walking out, the CEO made one final attempt to find a plan to profitability. “Are you sure there is nothing you can tell me,” asked the CEO. “Is there no piece of advice or new lending area that you can suggest in order to save our dying bank?”


The Examiner-in-charge shook his head and responded. “I am sorry; I have no insight as what works for other banks will not work for you. You must find your own path.”


As the Examiner-in-charge drove off, he rolled down the window and said his goodbyes one more time. “There is,” he said, “one thing that can save you and the answer lies within your bank already. That is really all I can say.”


While the CEO tried to further inquire, the Examiner would say nothing else. Perplexed, the CEO returned to the lobby pondering what the cryptic message was about. When the CEO came inside, the staff asked was there any other words of wisdom given. “He is just an examiner,” The CEO answered. “He didn’t give us a single bit of insight and only said that the answer to our plight is already in our bank.” The staff was puzzled and then returned to their work.


Over the next quarter that followed, each banker thought about what the Examiner had said and if there was any meaning in the parting words. Maybe the Examiner meant members of the Board will have an idea on how to achieve profitability again? They did have the best ties to the community and the most experience. Maybe, the CEO has the answer to building franchise value since she knows the bank better than anyone? On the other hand, it could be the CFO - he is always so analytical. The staff ruled out one of the senior lenders for he was on the meek side. But, then again, that lender was the first to offer a helping hand to anyone in need. Maybe it is the branch staff with the answer? They are closest to the customer and probably have good feedback. Wait, maybe it is one of the customers the staff thought? No one ever thought to ask them for their help. Or, the staff conjectured, it might not be a person at all and maybe it was one of their products. Their new 10-year fixed rate, EB-5 Visa lending program they rolled out to help immigrant investors was starting to get some traction.


As each employee thought about the answer to their problems they started to treat each other with an open mind and started to use active listening as they were all searching for the “answer.” Everybody started to analyze everyone else to see if they had insight. Interestingly, on the off chance that they thought they held the answer, each person started to believe that some of their own ideas may hold the key to the Bank’s future. Confidence and experimentation started to grow.  The whole staff turned less negative and more willing to experiment with new ideas.  More listening was taking place and more cooperation.


Finally, for fear that they were missing something right under their noses; employees started to market and promote existing products. The examination team did comment that the bank had over 70% of their customers with just one product.


Three months later, it was a loan processor the noted that the atmosphere in the Bank had changed.  Everyone was so positive and willing to try out new ideas. People were busy again and started to work the phones, hold events and engage the community. The CCO remarked that since the examination, instead of looking inward, employees were no more focused outward. The battle stopped being within the Bank. More customers started to come into the branch and use the Bank channels because now the Bank seemed compelling. There was energy, humbleness, hustle and respect in the air. Employees started to be proud of the Bank again and started asking customers for referrals and customers openly helped. These referrals brought other referrals in. As word-of-mouth started to expand, the community kept talking about the Bank’s dedication to local businesses.  


Soon it happened that bankers from other banks wanted to bring business over and inquired about joining the now thriving Bank. First it was one or two bankers and then it was a whole team from another bank that was attracted to join because of the culture and sense of camaraderie.


By the next full Safety and Soundness exam, the Bank had a new sense of purpose and it started to show in the numbers. Despite the Bank being so focused on the bottom line for all these years, now profit became almost a byproduct of their internal fabric. In fact, the more the bank focused on the journey and the processes within the bank, the more profitable they became. Thanks to the Examiner’s wise words, the Bank started to believe in themselves again and found that by treating everyone with mutual respect and openness, amazing things can happen.




As an outgrowth of this Bank’s newly found “center,” a group of employees started a trend that caught on. Instead of saying hello each morning or simply ignoring other employees, they put their hands together in front of them in a praying motion and bowed slightly. The gesture meant to convey respect and admiration with the thought each time that “I bow to you as you COULD hold the answer to my future.” In addition, most in the Bank took up silent meditation each day as if to say “I need to take time out for myself as I DO hold the answer to my future.”