In September, Peyton Patterson becomes CEO of BNC Financial Group Inc., which owns Bank of New Canaan, Bank of Fairfield and Stamford First Bank. The former NewAlliance CEO took time to share with the Fairfield County Business Journal observations on her career, implementation of the Dodd-Frank financial reform law, and community banks”™ role in the business community.
What was your upbringing?
I was raised by my mother who was editor-in-chief for a magazine in the State Department ”¦ so I grew up for most of my childhood with her; but my father was actually chief of protocol in the Air Force. My mother and father actually met overseas; my mother was in radio at the time, a former wannabe opera singer, and met my father. I was born in Germany, and we lived in Madrid for a couple of years, and then moved to the United States. So I”™ve called home Washington, D.C. ”“ that”™s where I went to school before I went off to college ”¦ The chief protocol officer is probably one of the favorite jobs in the military ”“ you know he was on active duty but he was really one who was extraordinarily good with people. He was in charge with entertaining and inviting the Air Force dignitaries to join in important events, politically, with the White House or whomever, really throughout most of Western Europe. So he was the front person, that when your president came to the United States and came off the tarmac, my father was there as the advance person. And he went on from there to be Frank Sinatra’Â’s sort of lead person in jazz, and … fashioned himself as a jazz historian. And so he then went to Las Vegas where he worked with a number of entertainers. It was a musically oriented family, which I cannot claim is anything that I chose to continue.
Where is Dodd-Frank today from the vantage point of community banks?
If we back up ”¦ the last few years have witnessed a lot of not-necessarily-great behavior on the part of banks. Not intentional, but I think this has prompted the regulators to say that banks that are not disciplined in terms of their risk management and”¦ pricing in the way they underwrite loans can lead to the end of a number of prominent institutions, which we saw. Out of that comes Dodd-Frank, and out of that will continue to come further regulation on capital requirements. We see what transpired with JPMorgan, so I”™m not sure even Dodd-Frank is the end of the story in that a highly regulated industry is going to be even more regulated. My hope is that it is not going to bury (the industry); that banks have done and will do a stellar job in performing in their respective communities ”¦ I think the impact of Dodd-Frank will most likely be seen in terms of the much higher costs and regulatory burdens at smaller and mid-cap banks that don”™t have enough capital; (and that) may not survive. And that”™s not necessarily a good thing.
How do you see the balance between community lending and shareholder value?
Your question gets to the responsibility of us as community bankers ”¦Â I think what is profoundly important … is here we do play a role in the community; community reinvestment in the form of lending is extremely important, and I think what we do has to be more than deposit-gatherers and loan givers. I think we”™re being asked to play a much more important role in terms of our philanthropy and what we do. You look at (BNC), it has not only demonstrated it”™s a great lender and deposit gatherer ”“ voted the No. 1 community bank in the state ”¦Â We didn’Â’t get there just making loans and deposits, I think it’Â’s the way we present ourselves to the customer; the way we look to the ‘gray’Â’ area in making loans ”“– really getting to know the client, I think that makes for the greatest success. And I think that”™s why the Bank of New Canaan has a 22 percent market share (in New Canaan); we”™re one of the smallest banks in the area, but we”™ve got one of the largest market share. Well, that proves that our model is working.
What”™s the most common mistake you would iron out for business customers seeking their first big loan?
I think when you get into the (commercial real estate) space you are getting into the space where someone has big ideas, big ambitions, and feels extraordinarily confident that their investment is going to be successful. And we all know that commercial real estate has probably been the most burdened by the economic cycle. Some have weathered the storm well, but a lot have not ”¦ It”™s not just about the financials but its about who you are and the relationship that you want to establish with us so that in approving the loan, we try to make deals work; but we really want to make sure that our interests our protected, but I think more importantly we have to protect the interests of our customers, and while they may come in for one size (of) loan, we may say, ”˜Okay, well we can do it under these terms and at this size.”™ And I think it”™s taking that customer”™s lifecycle (into consideration), to say now we”™re going to plan for perhaps a larger credit, we are going to restructure the credit as that business develops. As we all know the state of Connecticut is not a high-growth state and that businesses here need to be cottoned to and nourished, and I think that”™s the role that we play in the commercial space ”“ in making sure that the relationship is established and that we grow with them.
What”™s the best part of this job for you?
Two months into it, I would say so far I have been given a fabulous team. I am really enjoying working with each of them. A number of them I have known in my ”˜prior life”™ and I think the complementary skills that they have are ideal for where we”™re going. I would say secondly the corporate (board) is star-studded; these are very successful people, they understand business, they really understand and are founders of this company. So I knew that coming into it, that I would be working with a highly professional group. But at this point it sort of excites me before I take the helm in September that I think we just have such great potential. And I think that its about weaving and threading growth into a solid foundation, albeit somewhat small but with the ability to raise capital, to partner with potentially other companies but perhaps get into other businesses that perhaps we haven”™t gotten into before. That”™s what I”™m all about ”“ I”™m all about strategic growth but profitable and it makes sense, but not taking our eye off the ball in terms of the customer.
What”™s the worst part of the job?
The life of a bank CEO is never a dull moment. I”™ve been very fortunate to have been aligned with some fabulous companies, and I”™m very optimistic about my new tenure here. I think what one has to be mindful of ”“ I don”™t fear it ”“ is that change is exciting to some, but also scary as you go through the process. And it”™s all about the people, and the employees of the bank ”¦ I will have been successful if I can really align the interests of this company and all of us move the ball down the field in taking it to the next step. Aligning with people is your biggest opportunity, but also your biggest slip if you don”™t get it right.
What”™s your biggest sense of optimism for our region?
We start from a relative position of strength. Our unemployment level ”“ we”™re not nearly as high as the rest of the country, the Northeast really fared a lot better than a lot of our counterparts in most areas of the country. Having said that, I think that Connecticut has a couple of challenges: one, it has the highest educational gap in the country ”¦ That is a challenge that in my other life I am working on that with the governor. Secondly, it”™s not a high-growth state. It”™s a small state, it does not have a lot of growth, and it has what I would call the brain drain. We are fortunate to have some of the greatest academic ”¦ institutions in the country here, but a lot of these kids leave once they graduate to go on to more metropolitan areas. Investing in the state in terms of job growth is incredibly important ”¦ Our politicians are really focused on retaining the great companies we have here and ensuring a workforce to support that. I love Connecticut. I”™m a big advocate of the state and I”™ve lived in a lot of places. I think we have the ability to make change but we have to recognize that we are not necessarily the destination point that some other cities or states might be.
