Q&A: Community Banking - Market President
Throwaway account. Bored at work so figured I do one of these. Community Bank in CA with asset size in the $2-$6B range (rather not get too specific). My background and focus is commercial lending/banking; however, as Market President, I have my hands in everything. The ranges of deals I have worked on go from literally $50,000 - all the way up to $40MM. The largest single deal I did was $31.25MM and the largest borrower I worked with had aggregate credit commitments of around $45MM. We are generalist at this bank so that includes agriculture (we are a top agricultural lender), general C&I, and real estate. My background includes all of those...a lot of investor CRE, a lot of agriculture, and a good amount of C&I. Feel free to fire away.
Whats the comp package at that level?
$180,000 base. 2018 annual bonus (trust me plan which is based on production levels of the market but also some subjectivity thrown in) - $75,000 Stock - $50,000 (into retirement plan - cant use until no longer employed with Bank) Country Club Membership paid for.
Hi CommunityBanker, thanks for doing this! I work at a very similar bank, except in the Midwest. What was your career path to market president? Any work in corporate banking?
How do you view community banks and their (un) willingness to pay non-producers a market wage? I am in a credit role, and am constantly asking myself whether my employer will pay me based on my value to the company, or are they going to pay me as little as they can get away with, with the possibility that I may look elsewhere for more money?
No work in corporate banking. No work in Middle Market banking.
Started at my Bank as a Credit Analyst intern during my MBA program with no previous commercial banking experience (I was a teller in undergrad but did something completely different after UG). After completing my MBA - did I guess what you would call a mgmt. training program and cycled through different departments for a 1.5 years with the last leg going back into credit analysis working on more complex deals.
Then transitioned to a Jr RM role and inherited a pretty decent size book due to turnover. Excelled at it - expanded the relationships that I inherited and started bringing in new deals as well. Spent about 6 years at different RM levels until taking the Market President promotion. One of the top performing RMs during my years - we have about 25-30 RMs and I was always in or around top 5.
Pay for back office spots in community banking is rough. Unless you make it towards the top of Credit Administration. Community Banks need to run lean and means and it just doesn't pencil to be paying non-revenue generating employees. Not saying that is right - just saying it is what it is. Our bank pays revenue generators extremely well - which makes sense to do so. Doesn't leave a lot of room to compensate back office people and have it pencil. Your Efficiency Ratio will spike which in turn will impact ROA and ROE.
To make decent money in back office, youll need to go to a big bank.
Was the $31.25MM deal a syndication/participation or did your bank fully-fund that?
I fully funded it up-front. We already had the deal on the books at about $22MM but the client wanted to tap the equity appreciation and load up liquidity for their next project.
We did end up selling off $7.0MM of the ~$10.0MM increase down the road to free up loan dollars for that specific segment of the portfolio. So now our net exposure is around $25MM.
How much how your time is spent generating new revenue vs. managing existing lenders?
What are some of the biggest challenges to the job?
Does any support staff report directly to you, or are you mainly supervising the sales producers?
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