bill perotti group executive vice president,
TRANSCRIPT
Bill PerottiGroup Executive Vice President, Chief Risk Officer & Chief Credit OfficerFrost March 26, 2009
What Is On Your Banker’s Mind?
OrHas Your Banker Lost His Mind?
Cullen/Frost Bankers, Inc. is a financial holding company, Cullen/Frost Bankers, Inc. is a financial holding company, headquartered in San Antonio, with assets in excess of $15 headquartered in San Antonio, with assets in excess of $15 billion at December 31, 2008. Frost operates more than 100 billion at December 31, 2008. Frost operates more than 100 financial centers across Texas. The corporation provides a full financial centers across Texas. The corporation provides a full range of business and consumer banking products, investment range of business and consumer banking products, investment and brokerage services, insurance products and investment and brokerage services, insurance products and investment banking services.banking services.
Founded in 1868, Frost Bank is the largest independent bank Founded in 1868, Frost Bank is the largest independent bank in Texas, helping Texans with their financial needs during in Texas, helping Texans with their financial needs during three centuries. Cullen/Frost Bankers' stock is traded on the three centuries. Cullen/Frost Bankers' stock is traded on the New York Stock Exchange under the symbol CFRNew York Stock Exchange under the symbol CFR..
BBanking Todayanking Today
BBankers Concernsankers Concerns
WWhat Do Bankers Want to Know?hat Do Bankers Want to Know?
Credit Requests:Credit Requests: What to ExpectWhat to Expect
WWhat Can You Do?hat Can You Do?
AAttributes of a Desirable Relationshipttributes of a Desirable Relationship
BBanking Todayanking Today
BBankers Concernsankers Concerns
WWhat Do Bankers Want to Know?hat Do Bankers Want to Know?
Credit Requests:Credit Requests: What To ExpectWhat To Expect
WWhat Can You Do?hat Can You Do?
AAttributes of a Desirable Relationshipttributes of a Desirable Relationship
Regulated Banking:
"Three 6 Three Banking""Three 6 Three Banking"
Deregulated Banking:
"Life In The Fast Lane"
Deregulated Banking:
"Life In The Fast Lane"
"Take It Easy"
Deregulated Banking:
"Life In The Fast Lane"
"Get Over It"
"Take It Easy"
Deregulated Banking:
"Life In The Fast Lane"
"Get Over It"
"Take It Easy"
"Take It To The Limit"
Capitalism on Steroids:
No
Verifications
No
Testing
No
Blueprints
No Proto-Types
Capitalism on Steroids:
No Comprehensive
Oversight
No
Verifications
No
Testing
No
Blueprints
No Proto-Types
What Happened:
● Perverse Reward Structure
What Happened:
● Perverse Reward Structure ● Business Development without Balance● Focus on Things, not People● Stock Market Allegiance● Not Enough Questioning
What is a Bank?
bank:bank: 1. A monetary institution used to 1. A monetary institution used to receive, exchange, lend receive, exchange, lend and safeguard assets.and safeguard assets.
What is a Bank?
bank:bank: 2. A long pile or heap.2. A long pile or heap.
MorganStanley
LEHMAN BROTHERS
What is a Bank?
Three Types of Bankers have Emerged:
● Community/Regional Bankers
Three Types of Bankers have Emerged:
● Community/Regional Bankers● Mega Bankers
Three Types of Bankers have Emerged:
● Community/Regional Bankers● Mega Bankers● Investment Bankers
Industry Focus Today
Return to Basics
Industry Focus TodayP
rob
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Return to Basics
Industry Focus Today
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Return to Basics
Industry Focus Today
Gov
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Rep
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Pro
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R
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Return to Basics
Industry Focus Today
Gov
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nfl
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ce/
Invo
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Rep
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tion
Sta
bil
ity
Pro
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m A
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R
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Return to Basics
Industry Focus Today
Gov
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nfl
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Invo
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Rep
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Sta
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Pro
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Return to Basics
Confidence
Industry Goal Today
● Bring Back the Fundamentals and
Restore Balance
Industry Goal
● Restore Balance
Meet CustomerNeeds
Industry Goal
● Restore Balance
Meet CustomerNeeds
Protect Depositors
Industry Goal
● Restore Balance
Meet CustomerNeeds
Provide a FairReturn
Protect Depositors
Industry Goal
● Restore Balance
Protect Depositors
Meet CustomerNeeds
Provide a FairReturn
Support LocalCommunities
BBanking Todayanking Today
BBankers Concernsankers Concerns
WWhat Do Bankers Want to Know?hat Do Bankers Want to Know?
Credit Requests:Credit Requests: What to ExpectWhat to Expect
WWhat Can You Do?hat Can You Do?
AAttributes of a Desirable Relationshipttributes of a Desirable Relationship
Bankers Concerns● Unknowns● High Debt Levels
Bankers Concerns● Unknowns● High Debt Levels● Management Team’s Depth and
Experience
Bankers Concerns● Unknowns● High Debt Levels● Management Team’s Depth and
Experience● High Execution Risk● Lack of Alternative
Sources/Contingency Plans
BBanking Todayanking Today
BBankers Concernsankers Concerns
WWhat Do Bankers Want to Know?hat Do Bankers Want to Know?
Credit Requests:Credit Requests: What to ExpectWhat to Expect
WWhat Can You Do?hat Can You Do?
AAttributes of a Desirable Relationshipttributes of a Desirable Relationship
What Do Bankers Want to Know?1. Where Do You Want to Go?
1. Business Plan
What Do Bankers Want to Know?
2. How Are You Going to Get There?
1. Where Do You Want to Go?
2. Specific Purpose
1. Business Plan
What Do Bankers Want to Know?
2. How Are You Going to Get There?
1. Where Do You Want to Go?
3. What Keeps You Up at Night?
2. Specific Purpose
1. Business Plan
What Do Bankers Want to Know?
2. How Are You Going to Get There?
1. Where Do You Want to Go?
3. What Keeps You Up at Night?
2. Specific Purpose
1. Business Plan
3. Outlook for Company
What Do Bankers Want to Know?
4. What Do You Monitor/Inspect?
2. How Are You Going to Get There?
1. Where Do You Want to Go?
3. What Keeps You Up at Night?
4. Detailed Financial Information
2. Specific Purpose
1. Business Plan
3. Outlook for Company
What Do Bankers Want to Know?
4. What Do You Monitor/Inspect?
2. How Are You Going to Get There?
1. Where Do You Want to Go?
5. Can A Relationship Be Developed?
3. What Keeps You Up at Night?
4. Detailed Financial Information
2. Specific Purpose
1. Business Plan
3. Outlook for Company
What Do Bankers Want to Know?
4. What Do You Monitor/Inspect?
2. How Are You Going to Get There?
1. Where Do You Want to Go?
5. Can A Relationship Be Developed?
3. What Keeps You Up at Night?
4. Detailed Financial Information
2. Specific Purpose
1. Business Plan
5. Looking for a Partner ora “Rate Shopper”
3. Outlook for Company
BBanking Todayanking Today
BBankers Concernsankers Concerns
WWhat Do Bankers Want to Know?hat Do Bankers Want to Know?
Credit Requests:Credit Requests: What to ExpectWhat to Expect
WWhat Can You Do?hat Can You Do?
AAttributes of a Desirable Relationshipttributes of a Desirable Relationship
Credit Requests: What to ExpectCredit Requests: What to Expect
● Equity● Guarantees/Strong Supportive
Sponsor
Credit Requests: What to ExpectCredit Requests: What to Expect
● Equity● Guarantees/Strong Supportive
Sponsor● Appraisals● Interest Rates - Fair Return● More Questions
BBanking Todayanking Today
BBankers Concernsankers Concerns
WWhat Do Bankers Want to Know?hat Do Bankers Want to Know?
Credit Requests:Credit Requests: What to ExpectWhat to Expect
WWhat Can You Do?hat Can You Do?
AAttributes of a Desirable Relationshipttributes of a Desirable Relationship
What Can You Do?What Can You Do?● Educate the Banker● Ensure That Surprises Are Kept to a
Minimum● Provide Prompt and Accurate Financial
Information
What Can You Do?What Can You Do?● Educate the Banker● Ensure That Surprises Are Kept to a
Minimum● Provide Prompt and Accurate Financial
Information● Communicate Regularly
What Can You Do?What Can You Do?● Educate the Banker● Ensure That Surprises Are Kept to a
Minimum● Provide Prompt and Accurate Financial
Information● Communicate Regularly● Understand Your Banker’s Organization
What Can You Do?What Can You Do?● Educate the Banker● Ensure That Surprises Are Kept to a
Minimum● Provide Prompt and Accurate Financial
Information● Communicate Regularly● Understand Your Banker’s Organization● Make Sure the Decision Makers Are
Involved
BBanking Todayanking Today
BBankers Concernsankers Concerns
WWhat Do Bankers Want to Know?hat Do Bankers Want to Know?
Credit Requests:Credit Requests: What to ExpectWhat to Expect
WWhat Can You Do?hat Can You Do?
AAttributes of a Desirable Relationshipttributes of a Desirable Relationship
Top Ten Attributes of aDesirable Relationship
1. Do What Is Right
2. Realize That It Takes Time and Effort to Develop a Relationship
3. Keep All Channels of Communication Open
4. Deliver Bad News Face to Face
5. Make Deliberate Efforts to Understand Needs and Values
6. Give Timely and Well-Considered Responses
7. Provide Continuity Through the Longevity of Management
8. Strive to Exceed Expectations
9. Refer Additional Business
10. Remain Committed to a Relationship When Difficulties Occur
Top Ten Attributes of aDesirable Relationship
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