trending Market Intelligence /marketintelligence/en/news-insights/trending/i4REczNpEt40RrMR_an76Q2 content esgSubNav
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us
In This List

Bank, credit union executive moves not a two-way street

Blog

Banking Essentials Newsletter - February Edition, Part 2

Podcasts

StreetTalk – Episode 74: Investor sees legs in strong credit performance, US bank stock rally

Blog

Street Talk – Episode 74: Investor sees legs in strong credit performance, US bank stock rally

Blog

The Evolution of ESG Factors in Credit Risk Assessment: Environmental Issues


Bank, credit union executive moves not a two-way street

Job-seekingbank executives often have the option of looking for work in both the bankingand credit union spaces, but it is not always a two-way street for credit unionexecutives seeking new opportunities.

Whilecredit unions are generally open to looking at executive talent from a varietyof financial backgrounds, banks generally will only consider bankers, financialindustry headhunters told S&P Global Market Intelligence.

"Yes,that is very true," said Stacy Stevens, president and CEO of Park AvenueGroup, an executive recruitment firm that focuses on the banking industry."Credit unions would typically love bankers [because they are] bettertrained, have more diverse experience, understand operating efficiencies etcetera. But banks really snub their nose at credit union people for the exactopposite reasons."

BruceKershner, president of Kershner & Co., an executive search firm focused onfinancial institutions, said he has seen a considerable number of executivesmake the transition from commercial banks to credit unions. In fact, his firmrecently placed a commercial bank executive at a $2 billion credit union inCalifornia to be the successor to the CEO. And because many credit unions arenow developing commercial loan portfolios, they often seek out commercialbankers. "Unfortunately, I don't see that many executives go from creditunions to banks," he said.

ButJoe Brannen, president and CEO of the Georgia Bankers Association, said thereason may have more to do with the glut of banking talent now in themarketplace. He said he has not heard of any specific bias from bankers abouthiring former credit union executives. Instead, the consolidation seen recentlyin the banking space has put a fair amount of talent into the market, and banksin need of help or in expansion mode can choose from those candidates.

Brannensaid he could not quickly think of an example of a credit union executivemoving to a bank other than those involved with credit union-to-bank conversions."But some bankers have chosen to go over to a credit union. We've seenthat here," he said.

BruceWhitehurst, president and CEO of the Virginia Bankers Association, said he,too, was not aware of any situations where a bank in Virginia had hired acredit union executive as its CEO, but he has seen back-and-forth movementbetween the two sectors at other levels.

CarllWilkinson, managing partner for bank search and recruitment firm Smith &Wilkinson, agreed that the primary difference in executive searches for banksand credit unions is that credit unions are generally more open to looking attalent from both industries. But he said he does not see any other differencesbetween comparable banks and credit unions in terms of the general challenge infilling roles. "Banks and credit unions of similar asset sizes generallyhave similar abilities to pay and attract talent, and it is easier for largerorganizations — either banks or credit unions — to attract CEOs versus smallerones," he said.

Thatdynamic is based on a few factors, including compensation, Wilkinson said. Butanother influence is that running a small organization is challenging given thebreadth of technical expertise required, and the industry generally seems to bein agreement that smaller organizations are going to have a more challengingoperating environment than larger ones moving forward. Therefore, those smallerinstitutions will be less likely to thrive, meaning the roles attract lessinterest, he said.

Stevenssaid that, in general, any executive search has unique challenges, but creditunions have a particular issue because they cannot offer an equity stake intheir overall executive compensation. She has also found that salaries atcredit unions are usually a tad under the market, and their bonus and incentiveopportunities are generally not as enticing due to different priorities thanthose found at commercial banks. "But those individuals that are attractedto and open to this types of opportunity may have motivations other thanmoney," she said. For example, an executive may simply want to relocateand the cost/benefit is made up for in life circumstances.  Others are sometimes just tired of the bigbank push for profits at all costs in order to increase stockholder value, shesaid. Those executives base their decision more around the quality of lifebalance. "It's not that credit union presidents are any less skilled orqualified, but the relentless drive for profits versus revenues can beexhausting after a number of years in the industry," she said.

Kershnersaid in a February interview that it is not generally any for credit unions tofind executive talent than it is for banks. In fact, he said many of the bank executivesthat he calls for credit union C-level positions are sometimes intrigued by theidea. "It's a different animal, and I'm finding that many bankers are at apoint in their career to consider that type of change," he said. Kershneralso said that, at least among credit unions over $1 billion in assets, he hasnot seen any reluctance to compete with banks on executive compensation.