Howard Bluver, Studio Bank (TN) and Israel Discount Bank (NY)

In this episode, the guys are joined by Howard Bluver, Director at Studio Bank (TN) and Israel Discount Bank (NY). The depth and breadth of Howard’s professional experience serve as the foundation for a wide-ranging and engaging discussion. Howard discusses his “entry” into banking after obtaining a law degree and going to work with the Securities and Exchange Commission. From there, he shares the critical lessons he learned while working for the Office of Thrift Supervision during the Savings and Loan Crisis. He also discusses the value of being mentored during his time at GreenPoint Bank and the lessons that ultimately helped him turn around Suffolk County National Bank years later. Lastly, Howard shares some of his thoughts on the current state of New York City’s highly publicized multifamily real estate market and his outlook for institutions like New York Community Bank.

For more insights and ideas, visit DCG at DarlingConsulting.com or follow us on LinkedIn.

Transcript

On the Balance Sheet S3E4 Howard Bluver, Studio Bank (TN) and Israel Discount Bank (NY)

Transcript

[Vinny, 00:05]

Welcome to On the Balance Sheet, Season 3 Episode 4. Today, we have a guest who we're so fortunate to have. I would maybe argue the most wide-ranging resume of anyone we've interviewed thus far. It includes a law background, the SEC, the OTS, working in mergers and acquisitions and leading banks, becoming Chief Executive Officer, serving on two separate boards amongst a number of other different things. We have Howard Bluver, who is a director currently at Studio Bank and Israel Discount Bank in New York. Zach, what an awesome interview.

[Zach, 00:44]

Howard's terrific, and I think you maybe undersold the first part - what a wide-ranging and really tremendous career. I've known Howard for the better part of probably 5-6 years now with my work at Studio Bank. I know he's known Matt for forever with some of his work, and we'll get into all of it during the interview. I wish we had three hours with him instead of the 45 minutes that we had here. So terrific interview, terrific guy. I think a lot of great insights for our listeners today, too. 

[Vinny, 01:09]

Yeah, such thoughtful responses to so many of our questions and I think our listeners are really going to like it. So, without further ado, Howard Bluver.

[Zach, 01:26]

Welcome to On the Balance Sheet. We're very pleased to have a very special guest here with us today. It's Howard Bluver, he is the Lead Independent Director at Studio Bank. He's also on the Board of Directors at Israel Discount Bank. He happens to have his own consulting practice on the side, too, after his long banking industry at JDS Financial Group. Howard, how are you doing this morning?

[Howard, 01:47]

I'm doing great. Thanks for having me.

[Zach, 01:49]

Absolutely, it's our pleasure. And I know you've had a long history with us and Matt, but before we jump into some of the more recent things, can you just walk us through, like what we usually do with these interviews, how did you get started in banking? What intrigued you? How did you get into the industry? If I'm not mistaken, you have a law degree, as well. So, you are an attorney, or you were an attorney, as well.

[Howard, 02:10]

Yes, I am an attorney. I have not practiced law in a long, long time. But after I graduated law school, my first job was at the Securities and Exchange Commission, and I was assigned to the Division of Corporate Finance, and I happened to be assigned to the group that covered financial institutions, bank holding companies, insurance companies, private companies that were going public, that sort of thing. So, the first three years of my career, I mean, when you work in the SEC, they sort of throw you in and say figure it out. And so, I got assigned to cover many bank holding companies that filed either for mergers or IPOs or 8Ks with special events. So, I got to really learn the banking industry through that and the way I did it there is I ended up dealing with some of the top banking lawyers in the country who had represented banks that were in front of me. So, it was an education. I was lucky, I had no idea that I would end up in the banking industry. But I learned that I loved it, I understood it. And so that is sort of where it all started at the SEC. I then at about the three-year mark, when you first start at the SEC about three years in, you have to decide whether you're going to stay and make it a career or leave. And it was a tough decision for me because I really loved it there. But I left and went to a law firm in DC and did bank M&A, took a few banks public, and did a lot of banking work with them. And then I was recruited by the Treasury Department to come to OTS in the middle of the S&L scandal. And so, I was off and running from there. So, that's sort of how I got into the industry.

[Zach, 04:04]

Howard, what was it like being at the OTS during the heyday of that crisis? I think most of our listeners are pretty aware of what was going on there, but it had to have been a pretty wild time.

[Howard, 04:14]

Yeah, it was a very wild time. I mean, you know, I got lucky in a sense that, after Tim Ryan became the head of OTS, he created a small group of professionals reporting to him directly, who would be assigned to figure out how to resolve the biggest thrifts in the country. I was lucky enough to be assigned as the top lawyer for that group, so there were lawyers, investment bankers, accountants, and we were tasked to go out to the largest thrifts that were in trouble in the country. The Cal Feds, the Glenn Feds, the Dimes, the Carterets, and to figure out resolutions. So yeah, it was an absolutely crazy time, Zach. And I still remember to this day many of the board meetings - going into these boardrooms to these top institutions and basically telling them very politely that, here's a piece of paper that you must sign that says we get to do whatever we want and if you don't sign it, you’re toast. And so, it was a wild time, for sure. But the knowledge, the experience I got in the few years that I was there, you can't buy that, it really taught me everything I had to know about banks and how they got into trouble, how to resolve them, what the factors are. It was crazy, but for me it was the best time. And you also felt like you were doing something important. It felt like you were contributing. I mean, we didn't get paid anything, but the real thing was we felt like we were contributing.

[Zach, 05:58]

How did you go from one side of the table to the other side and over at Greenpoint Bank back in the 90s?

[Howard, 06:03]

So, I worked for the SEC and at the law firm, then at OTS. I had worked with the top law firms in the country for years by then. Wachtell Lipton, Sullivan Cromwell, you name them. And I got a call from Ed Herlihy, a partner at Wachtell Lipton, that Greenpoint Bank in New York City had just done the largest mutual to stock conversion at the time, they had raised a billion dollars. And Tom Johnson had become the new CEO there, and Tom was a legend. He was at M&T, at Chemical Bank, he was the President. And he was recruiting a team to sort of figure out how to put all this capital to work and to grow the bank. So, Ed set me up with Tom, and Tom and I hit it off and he asked me to come to Greenpoint as the as the new General Counsel, so I did. And we went to Greenpoint, it was in the heyday of bank merger activity, back what I call the Golden Days. In the 11 years that I was there, we did many, many acquisitions. We also grew organically, we went national, so it was a great time. Tom used to, you know, he would give me more and more responsibility over the years. By the end he used to tell me – you're in charge of everything at this bank that does not produce revenue. So, watch expenses, everyone else produces revenue, you just have expense. But by the end, I was in charge of basically everything that was not an operating regulatory credit like, you know, CRA, technology, etc. So, I mean my title, when we finally sold was Chief Enterprise Risk Officer. That was a golden time for me as well. And you know, Tom is one of my mentors that I reported to him directly for the entire time that I was there. So, I watched him grow this bank from a $2 billion little thrift in New York to a $15 billion asset national company. Again, I felt honored to be there.

[Zach, 08:29]

Howard, how do you feel like that experience prepared you to become the President of Suffolk National? I know that was a few years later, but it seemed like you had a lot of experience and a lot of responsibility at Greenpoint. How did that kind of set you up on that path to running Suffolk?

[Howard, 08:44]

Now it meant everything. When we sold Greenpoint to Northfork, by the way, well north of three times book value which, those days are long gone. But that's where I opened up my own consulting practice and I got lucky because it sort of coincided with when bad things started to happen to the industry. One of my clients that hired me a few years later as a consulting client was Suffolk County National Bank. They had gotten in trouble on the credit side of the bank where they had made a whole bunch of really bad commercial real estate loans all concentrated in the Northeast and on Long Island and at the point they hired me, they had over 10% non-performing loans on the books. They were running out of capital, they were being sued, it was a real disaster. So, the board brought me in to help them figure out how to get out of this. This was in 2011, basically, and I was a consultant for the board for the last six months of the year. And so, I studied the bank very, very closely and I was able to use the experience that I had gained at both the government in the S&L crisis, and also at Greenpoint to figure out how to grow. So, at the end of the consulting period at the end of 2011, the board asked me to become CEO of Suffolk and I accepted. And so, I was announced as the new CEO literally the first day of January in 2012, so that's how I got there.

[Vinny, 10:33]

Howard, Vinny here. And again, thanks so much for joining us. I wanted to back you up before we expand upon it because we're kind of going chronologically. One thing that we talked about with so many of our guests is the influence of being mentored. Specifically, you were kind of alluding to Tom Johnson and the kind of role he played in your career. I'm wondering what are two or three main, four or five takeaways, if you can recall, of how you folks were able to grow an institution from 2 billion up to 15 or 16 when you sold? What were the key factors? What drove it? I mean obviously maybe geography and so forth. But acquisition, I'm just wondering what were some of the really important lessons that you learned from him and ones that may still be applicable to a banker who's running an institution today?

[Howard, 11:18]

Yeah, it's a great question. So, Tom taught me so much over those 12 years. One thing personally, I mean, you're involved in so much and when you’re working 24/7, he made sure he basically taught me that in life, it's 1/3 work, 1/3 family and 1/3 philanthropy and faith and I never forgot that. I mean, besides professionally, he taught me so much about life. On the professional side, he was one of the first mentors that I ever had. He was unbelievably data-driven and everything that we looked at to expand was all about the data, and it was all about the management and the people. And so many deals were coming our way. So, so many bankers would come and for every deal that we did, we probably looked at five and turned them down for two reasons. One, we didn't like management. I mean we weren't impressed with the management. We didn't have good instinct about them. And then second, in due diligence, Tom demanded complete data on every single thing that we were looking at and we would not go forward with anything until he was satisfied that he understood exactly what the financial situation was. Whether it was looking at credit, whether it was looking at liquidity sources, whether it was looking at core deposits, I mean, we wouldn't go into a deal unless Tom was absolutely confident that we had a full understanding of the numbers. And so, when I see these deals get announced where it's obviously not enough time to do complete due diligence. I shook my head and I said they can't know what's going on there. You know, bankers used to, well this is competitive, you know bids are due this day, you have to be ready. And if that was the case, we said we're out if we were not comfortable with it. So, you move quickly, you work hard, but you don't pull the trigger until you're 100% certain. And that's one lesson that I gathered. And then the second one, you know, you talk about management. Tom taught me the banking industry is sort of unique and that there's no patents. Everybody can offer the same products, the same services, the same everything. You know, there's no motes, there's no unique of your products and services. What's unique are the people or management, the people running the place and you know, when we looked at a deal, or we looked at expanding through hiring teams. I mean, we spent an inordinate amount of time with management and talking to them, getting to know them and understanding them, making sure that we were aligned with how they were aligned in terms of the future and what the factors were. And if we were not comfortable with management, even if the numbers worked, we would not go forward. So, I guess that's two of the lessons that Tom taught me. Management means everything, people mean everything and know the numbers, know the data, understand it before you pull the trigger. And I brought that to everything I've done since, and I'm very grateful to him for that.

[Vinny, 14:59]

Thanks, Howard, for that answer. That's extraordinarily thorough, and I can't help but think about how that sort of relates to our own life here at Darling. Matt Pieniazek and George Darling having huge influences on us. And I will tell you without a doubt, Matt is clearly data-driven in a lot of his decisions and George and Matt would always say our assets always you know, walk home, they walk out the door every night and go home. And boy, that I think serves everyone well.

[Howard, 15:26]

I mean, that's why I hired you at Suffolk and that's why I made Studio hire you just for that reason.

[Vinny, 15:31]

Well, thank you for your confidence in us and, again, obviously it's a pleasure to learn more about your career. So now let's kind of leap back forward to the timeline, I suppose if you don't mind, you get into Suffolk County, and I think I read that you folks were in jeopardy of being delisted. What's the background there?

[Howard, 15:45]

Yeah, we were. So that's the least of it. So here was the situation Vinny, when I got to Suffolk and agreed to take the CEO job, which all my mentors and everyone thought I was crazy because they assumed the bank was toast. So just to put it in perspective, over 10% non-performing assets, under a formal agreement from the OCC, major class action lawsuits going on because the stock had basically tanked, NASDAQ delisting was going forward, and there was an SEC investigation going on into prior filed financial statements I mean relating to the possible inadequacy of prior reserve levels. So that's what I walked into. But you know the reason why I agreed to take the job is in the months that I was a consultant, one of the things I learned was that all the issues that Suffolk was struggling with were on the asset side of the balance sheet. If you look at the deposit franchise that Suffolk had, it was by far the most attractive deposit franchise I had ever seen. 45% of their deposits were non-interest bearing. They were stable because they had thousands and thousands of local small business operating deposit clients. Total funding costs were under 30 basis points and none of that got impacted negatively by any of the publicity going on with respect to the asset problems because the customer base, what was such, that they didn't read the Wall Street Journal. They didn't read the American banker. They didn't watch CNBC. They were local community people. And so, what I believed then, and I believe it more even now, is that the core deposit franchise that they've created over 150 years cannot be replicated. You can't create that anymore. All the problems on the asset side can be fixed, you can sell bad loans, you can bring in new people, you can raise capital, you can do all that kind of stuff, you know, but you cannot replicate the kind of core deposit franchise they had. So, my plan going in was to, you know, fix all the bad things, but make sure that the core deposit franchise stood. And that's exactly what we did, and it worked like a charm. I told my guy who was running the deposit franchise – look, a lot's going to be going on here in the next two years, your job is to keep the deposit franchise as it is, and I'll take care of everything else. So, you know, we got in, that's why I took the job. And so, I was announced on January 1st, 2012. By the end of 2013, two years later, we had sold off all the bad loans, we had done a pipe to raise a lot of capital. We had settled all the class action lawsuits. We resolved the NASDAQ delisting and we started at the end of the 2013 clean, we had less than 2% non-performing assets, we had a lot of excess capital, and we also had this golden deposit franchise. The other thing I did going back to the management thing, I brought in an entire new executive team. I brought in a new CFO, Brian Finneran, new Chief Lending Officer, new Chief Credit Officer, new Controller. I brought in people that I had known that I had trusted that I worked with. And so basically the lessons that I had learned before I got to Suffolk, I implemented when we got there, and it worked like a charm and that's how we turned the place around and it could not have been better.

[Vinny, 19:54]

You know, Howard, I remember being involved in some capital planning projects for your institution back at that point in time and having the pleasure of working with Brian Finneran, your CFO at that point, just a great banker. It's clearly a herculean effort by you, but it comes back to the deposit franchise. So many banks, they come on and they want to figure out how to do that, and that's really just kind of the secret sauce. If that side of the balance sheet works, you can figure everything else out. On the other side, it might take a little discipline, a little bit of pain, but you can do that. Going from that period and then fast forwarding into the 2016-time frame, I remember seeing an article on the American Bankers Association, actually I recall seeing this. The OCC came back, I guess they just must love spending their time on the East End of Long Island, I can't figure out any other reason. And they come back in, and they start going after you for commercial real estate concentrations and being three times capital and so forth. What are your thoughts? I know maybe that sort of got you folks into a place where it said – well, geez, this is kind of our core business and now we're going to have to put a governor on it and I think you were even quoted saying, they want us at 9%, tier one and so forth, which is restrictive, right? Let's just face the facts here. Can you share a little bit of that and your perspectives on being told to manage three times capital?

[Howard, 21:23]

Yeah, it's a great question and, ultimately, that is the reason why I'm recommending to the board that we sell the company. A little background, so where we were, where Suffolk operated, Long Island, you know the city, Westchester, where we started. It's a very, very tough C&I area that most of your local community banks, particularly on Long Island, commercial real estate is the lifeblood of their business and that's because it's really hard on Long Island and in New York in general to start C&I businesses it's really competitive, it’s expensive. And so, what I found when we started expanding that all the banks were, you know, sort of fighting over a static amount of C&I business and the only real growth was on the commercial real estate side. It's a function of where we were. And so, we grew commercial real estate a lot but in what I considered to be a very safe and sound manner. In other words, I had long term relationships with many of the top real estate developers in both New York and Long Island, people that you would have heard of like Tri Tech and Fairfield and people like that. And we grew the loan book through doing deals with those kinds of sponsors, which were extremely financially strong and there was never an issue about worrying about credit quality with those people. And, you know, we were also very cognizant of the 300% level, which is not a prohibition. What it is, is those rules say if you're above 300 then you have to do enhanced due diligence, and here's the things that you have to do and here's the information you have to get. We did all that, but nevertheless when we started to get over 300, the regulators came in and they wanted us to slow down. So, ultimately what I did is I went to our board, and I said – look, you know, looking five years down the road, we should compare two things: One, what can we do on our own with the constraints on growth that we're going to have if we can't do commercial real estate versus what kind of premium a buyer is going to pay us based on the quality of our deposit franchise. And the numbers weren't even close. If you looked at, we did this over a period of six months. We did various models, and we basically showed from a stock standpoint that there was absolutely no way on our own that we could get to a multiple of both earnings and tangible book value on our own versus what banks were willing to pay us for our deposit franchise. And so that's ultimately why we ended up selling and people are like I was a hero because we ended up selling it over two times book, but for me it was in a way kind of sad because here was this 140-year-old Community Bank that served its community, was well ensconced in the community, our employees all live there, our customers all live there, but we ended up doing the right thing because without being able to grow commercial real estate, there was really nothing we could do. So, we ended up selling the bank and that's why.

[Zach, 25:22]

Howard, it's a really interesting story and actually Vin sent me that article he referenced this morning and the headline or the title, however, was Higher Capital Requirements Could Be Coming for Serious Heavy Lenders. This is May of 2016 American Banker. I'm sure that headlines have been used numerous times over the years here and it's probably applicable today too. And kind of to segway, I mean you're in the New York area, in Long Island, Manhattan. New York Community Bank obviously has been a story in this first quarter. What do you hear, and do you got any thoughts on what's going on there or the overall kind of multi-FAM office, commercial real estate markets?

[Howard, 25:59]

Yeah, I've been answering many of those questions since the whole NYCB thing. So, by way of background, I think most people who follow this space understand what the impact was of the new law, which came out in 2019. I did rent stabilize multifamily lending for years both at Greenpoint and at Suffolk, and it was probably one of the safest niches you could be in from a credit standpoint because the rent stabilized nature, the cash flow, it was always guaranteed. What people don't realize is the way the business really works from an owner’s, from a landlord’s standpoint, is the owner would take out a loan to buy a rent stabilized building, right? And then, usually the loan, let's say it's a five-year loan, maybe even interest only. Well, during those five years, the owner could raise rents 3, 4 or 5% plus pass on a certain amount of operating costs in the form of higher rent. So, let's say over that five-year period the rents would go up 6% a year. Well at the end of the five-year period, that extra cash flow, you would justify a higher loan and so the owners would refinance at a higher loan and then pay themselves through that loan, right? That's how it worked, and it worked great and like some owners would refinance to the maximum they could, to take out as much as they could, some would do it more moderately and put more into the building. But it was a great business and it worked. There were no losses, no delinquencies. Then this 2019 law came, and it changed that whole dynamic. Now you can't raise the rents, you can't pass on cost of the building to keep up the building and so, it makes owning these buildings uneconomic and that's the real impact because now the owners can't pay themselves, they can't make a living by not being able to take out ever higher loans that are justified by higher cash flow and so all the horror stories that you're reading about this area, that's what's causing it. And so, what's the solution? Well, some owners are selling buildings for cents on the dollar. Others are lobbying and just keeping things open and vacant, not putting money into these buildings. And so, I actually think that there's a lot more pain to be realized here that the value of these buildings is going to continue to deteriorate, but I'm not sure that all the pain has been realized. Now from a bank's perspective, most of the banks that I know, I don't think it's going to be an existential threat to a lot of them because I think they've been reserving for it, and they know it's coming and all that. But from a societal standpoint, I think this is going to be a disaster because there's millions of these units in these buildings and I'm not sure that it pays to own them. The only way it’s going to pay to own them is if someone buys them at big, big discounts. And I'm talking $0.30 on the dollar $0.40 on the dollar. I think that's the only way math is going to work and a lot of that has not happened yet and so, I think it's to come. What's going to be interesting to see is NYCB, which has by far the biggest loan book in this area. What's going to be interesting to see is when they come out with their first quarter results, they have promised a lot of details, a lot of numbers and a lot of strategy updates. And it’s going to be really interesting to see what they say then because I'm not sure that in the time period that the deal came together, that there was enough time to dive deeply into this loan portfolio on literally a loan-to-loan basis, which I imagine that's what they're doing right now, and we’ll see what happens. But it's going to be very, very interesting to see.

[Vinny, 30:23]

Yeah, Howard, thanks so much for that. It kind of went right where I was heading, which was, you look at the recapitalization or the billion dollars put into NYCB and I got to tell you, bankers all over the country, they always play the side, whether it's over a coffee or a beer at dinner and it's like should I buy that stock? I'm like, I'm the wrong guy to ask, but from what I understand, they've got $16 billion of this stuff on the balance sheet. And if you're telling me, boy, the math only works if it's $0.30 on the dollar, even if a billion dollars isn’t really covering much, but at the same time, I'm like Steve Mnuchin’s a pretty connected guy. Is there a chance they may get these laws overturned? Is that out there? Is that a real thing? Is that the only way that investment of a billion dollars in this institution makes any sense? I don't know, I'm just curious.

[Howard, 31:15]

Yeah. So let me give you my views on that. First of all, just to be clear, I have no inside information on NYCB. They have not been a consulting client or anything like that. I do know a lot of people there because many of them worked for me at Suffolk, but I only know what I read publicly and call reports and SEC, all that stuff. But you know, if you look at the breakdown that they put out, I don't have it right in front of me, but what they did put out as of the end of 2023 is if you look at the multifamily portfolio and what is classified, it was a huge number. I think I'm remembering it was something like 17 billion of their multifamily portfolios is classified, and I could tell you just knowing NYCB you know, as I do, they were very conservative lenders in multifamily and they had no losses for years and years and years and their LTVs were extremely low, at least as origination. So, if they're classifying that much of the portfolio, then there's got to be more pain there and you can do calculations on the back of a napkin to see if a billion dollars in capital is enough. I don't know. I've been asked by a lot of people too: Should I buy NYCB stock? And you know, I don't answer the question, but I say I'm not buying the stock, let me put it that way.

[Vinny, 32:53]

No, that's terrific. And because we're not equity, but I was like I don't know if this math kind of works here. 

[Howard, 33:02]

You know, and a big part of it, which has gotten no press because I think people don't understand how the business works. They need to look at the loan portfolio on a loan-by-loan basis to see, so these sponsors, these owners, when they refinance and pay themselves through a higher loan balance, some take out a loan at the highest LTV that the bank would allow, and some take a much smaller amount, pay themselves modestly so the loan balance can get lower and lower. They need to figure out on a loan-by-loan basis what that is because if the average LTV was much higher because a lot of the loans were recently refinanced and have higher balances. That's going to impact the valuation much more and that analysis can only be done on a loan-by-loan basis. And I'm sure you're quite sure that's what they're doing right now. So that will tell you a lot. But my fear is, is that they already know some of this and that much of the classified loans that they've put out publicly are ones that have a relatively higher LTV than they were at origination because they've been refinanced multiple times and money has been taken out.

[Zach, 34:24]

Yeah, I know we're all going to be looking at that release in April and this episode probably will come out around that time too. So, it will be a must listen On the Balance Sheet and the earnings release report from them. So, Howard the last thing I have, because we really appreciate all the time and thoroughness, and detail today is what I mentioned at the start. Which was – you've had a pretty illustrious career in the bank management side, but you're also Director, now on the board of Studio Bank in Nashville, in Israel Discount Bank in New York. Can you just give the listeners a little glimpse into the regulatory side, you've been on the bank management side now you're on the Director side. How has that changed the lens that you view bank profitability, bank management, and things of that nature?

[Howard, 35:15]

Yeah, so it hasn't impacted it as much as you would think because you know I've been on boards, I've been dealing with boards, I've reported to boards. But I will say this, the role of the director of the bank has changed dramatically since I first started out. It used to be much more ceremonial, you'd have a meeting every other month, have a nice lunch, go back. It's much different now. You really do need to work. And you really do need to know what's going on. You do need to hold management accountable for providing you with the detailed information that you need to really know what's going on. That has grown immeasurably. The best management teams know that, and they build into their processes a board management of the process where there is a flow of information on a regular, timely basis with enough time for board members to understand it, read it. And then board meetings need to be long enough so that there could be detailed discussions. There needs to be executive sessions without management. And so, it still needs to be collaborative, and it needs to be cooperative. But there also needs to be a clear delineation between your board and management, and if something goes wrong, which it inevitably does, the board needs to step up, understand why, hold management accountable, deal with compensation issues, and not just be a rubber stamp. So, it's a real job now and it's much more than it used to be.

[Zach, 37:10]

Howard, anything too from that perspective, because I know you worked with Studio and they were de Novo, you worked with Israel Discount, and they've been around for a lot longer. Are there different roles you play at different banks given one's a lot newer, one's a lot older, how do you view that? Just in the environment, too, that we've seen the last couple of years; obviously a lot a lot has changed.

[Howard, 37:29]

I do chair the Audit Committee of both Banks, which is different. Studio is a small bank, IDB is big. The basic role is the same, but the data you get and the information that you get is much different. I wouldn't say that you act differently depending on the size of the bank or how old it is, it's still a matter of getting the data and the information that is useful and appropriate for a bank that size. Getting it on a timely basis and making management understand that they need to keep the board informed on a real time basis with the most important information there is. That information is different depending on the bank, but the job is basically the same when you bring the same force into it, I guess is the way I would answer it.

[Zach, 38:30]

No, I think it's a great answer, and I could keep going all day. Howard, we really appreciate your time. Vin, do you have anything else for him before we wrap everything up?

[Vinny, 38:38]

No, Howard. Thank you again for your time. Just a wide-ranging career, amazing resume, terrific perspective, I enjoyed all of it. This is great, like Zach said, we could have chatted forever. But thank you for your time, we certainly enjoyed this, and I think our listeners did as well.

[Howard, 38:55]

Well, I appreciate you having me. It was a lot of fun.

[Zach, 39:00]

Welcome back to On the Balance Sheet. Wow Vin, what a great interview. Howard was terrific. Such a far-ranging career that he's had. And I do wish we had a lot more time to speak with him. But I think as we normally do takeaways here, there's a number of them overall. My biggest one, I think, and I'm going to link mine back a bit to the last episode too with Jim Cohen, is Howard had a very big focus when he's talking about making deals and acquiring banks, selling banks, investing in banks about management and how important the management team was, who was running those institutions. And he said obviously the data was important, and his mentor, Tom Johnson, was very into forward-looking with the data and knowing the numbers. But even if the numbers look good, if they didn't have a good feel for management and the people leading the bank, they didn't want any part of it. I think that's just such a critical component. And Jim last episode had some thoughts on how important management was and that they had skin in the game as well. But I think that just to me was a really interesting piece where all the bank CEOs, CFOs out there, what you're doing is so important from an investment standpoint, from an acquisition standpoint and people know that they're looking at those type of things and I think Howard really hammered that home during his time when he was at Green Point and also at Suffolk.

[Vinny, 40:26]

Yeah, that was obviously a standout from the interview. The other thing that stuck to me and maybe we didn't spend as much time on it as it really was worth looking into is how he turned around Suffolk County National Bank. If you go back to that point in time, he outlined all their issues. They had a significant level of non-performing assets, they're under a formal agreement with the OCC, they were at risk of being delisted from the NASDAQ, there was a pending SEC investigation, there were class action lawsuits filed, etc. That is an incredible turnaround story when you really look at it and I think he very smartly recognized that the backbone of that institution, really any institution, is a very strong core deposit base. You hear people talk about it all the time, but in reality, they had it and that's not something you replicate overnight. That institution had been around for over well over 100 years and they could draw upon that. And he was smart to realize how important those relationships and those depositors were to buy time for that organization to kind of divest itself of some of the assets that they had to kind of move on from and then get their business, you know, kind of started back in the right direction. So, to me, and I personally saw some of those things and was aware of them as they were going on. Maybe we sold that part of the podcast short because he did a hell of a job in that regard. To me I think a lot should be said for what he accomplished there and a wide-ranging career and that's just several years in it, and it was an absolute joy to speak with Howard. So, I hope our listeners enjoyed this one. I think they certainly did and just want to say thank you for listening On the Balance Sheet and we look forward to having you join us again in the future episode.

[Dana, 42:31]

On the Balance Sheet is a podcast produced by Darling Consulting Group, DCG. All views and opinions expressed by the hosts and guests are solely their own and may not represent those of DCG. All third parties are independent entities and are not affiliated with DCG. This podcast is intended for informational and educational purposes only and is not considered as advice. All views and opinions expressed are based on the information available at the time and may have changed based on the current market and other conditions. For more information about DCG, please visit www.darlingconsulting.com or e-mail us at info@darlingconsulting.com. Today's background music is provided by John, Sid and Como Media and can be found on pixabay.com.

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