Banker's ascension a sign of local market's importance

Since the acquisition of Clearwater-based USAmeriBank in 2018, Florida, and particularly the Tampa Bay region, has become a market of critical importance for Wayne, New Jersey-based Valley Bank. So much so that Joe Chillura, the former USAmeriBank CEO based in Tampa, was recently promoted to senior vice president and head of commercial banking for the entire organization.

It’s somewhat unusual for such a role to go to someone not based at corporate headquarters. But Chillura, 55, says it makes total sense in the context of recent market trends.

“Florida represented half of our growth last year,” he says of the bank, with $43.42 billion in assets and some 240 offices. “It’s a little more than a third of our balance sheet. So, it’s meaningful, and clearly Florida has a lot of momentum. Tampa, specifically, has maybe as much as anywhere.”

"Technology can get us to a certain point, but ultimately, you’ve got to have somebody at the wheel." — Joe Chillura, Valley Bank senior vice president and head of commercial banking

The move also makes sense because of geography and migration. With so many investors, entrepreneurs and businesses leaving the Northeast for the Sunbelt (Valley also has offices in Alabama), it’s only natural for someone like Chillura to have a prominent role in business banking operations.

“Joe and I have worked together for over 30 years,” says Chillura’s colleague Al Rogers, Valley Bank’s executive vice president and chief lending officer for Florida and Alabama, and another veteran of USAmeriBank. “He’s been a commercial banker his entire career and done what everyone is trying to do, at a very high level. The empathy that comes with someone who has done that job is impossible to replicate for someone who hasn’t been in the trenches.”

But with issues such as supply-chain chaos, rising inflation, a turbulent labor market and housing price spikes causing concern and consternation for businesses, Chillura hasn’t been handed the easiest of assignments — and he will be challenged in unexpected ways.

“Part of the allure of Florida is that it’s affordable, right?” he says. “And we still have a favorable tax environment, which is good. But as prices go up, taxes go up, as well. And so that creates a burden on the people who are moving here and what they can afford. I think it’s become a bigger question mark as to whether it makes sense to move here.”

The upward creep of the cost of goods and services has made its presence felt in other, just as significant, ways, Chillura says.

“The labor issue is a big problem,” he says, “especially on the lower end. I heard the other day Walmart is paying people 25 bucks an hour to stock shelves, and everybody who works in a [restaurant] kitchen is quitting and going to work there, because it pays more, it’s a lot less stress, it’s not as hard. But you’ve got to realize that whereas Walmart can afford to pay $25 an hour, some of these other businesses are going to have to come up and, as a result, you’re going to see inflation across the board for food and beverage.”

Target Acquired

Another trend not going away anytime soon is consolidation in banking. Valley Bank, for one, recently augmented its Florida foothold with the acquisition, for $113 million, of Bank Leumi USA, a New York-based subsidiary of Israel’s Bank Leumi Le-Israel B.M. With offices in Miami, adding Bank Leumi and its $8.3 billion in total assets to the fold gives Valley additional market share in the fast-growing, competitive South Florida business community. Bank Leumi also has offices in Chicago, Los Angeles and Palo Alto, California.

The transaction “solidifies Valley’s position as one of the premier full-service commercial banks in the country,” Valley CEO Ira Robbins says in a news release about the deal. “We are incredibly excited about the new business capabilities and the differentiated growth opportunities that Bank Leumi will bring to our combined organization. We look forward to continuing our journey together.”

Chillura, however, is quick to point out Valley doesn’t have designs on being the biggest — just the best, particularly when it comes to middle-market business lending.

“A lot of banks do a nice job on the real high end; they cater to $100 million and up businesses,” he says. “And then the small community banks have typically filled the void for small credit needs. We play in the middle, where we feel like there’s a scarcity of banks willing to play in that space and have the capabilities to make a difference there.”

Rogers concurs, saying the Bank Leumi deal will allow him and his team to “focus more intently on companies with $50 million in sales.” Companies in that segment of the market, he says, are concerned about inflation and interest rates.

“That’s because bank debt has traditionally been so important to fuel the growth of many of our customers,” Rogers says, “but the cost of that debt, obviously, is very important, and the Fed has begun to telegraph rate rises in the future. Everyone is clearly on edge to determine how that will impact them, how that will impact demand for their products and how it will impact their cost of capital.”

Rogers, like many of his peers is on high-alert for any Fed moves. "Hopefully," he says, "they won’t overcook the egg and throw us into a recession. That’s what we’re all praying for — a soft landing, with just a little bit of tempered enthusiasm and demand, would be the best outcome, as opposed to overcorrecting and pushing us into a recession.”

Technical Difficulties

Chillura says the biggest challenge that comes with aggressive expansion is “keeping up from a technology standpoint … that’s a race that’s difficult to run.” Organizational culture, client relationships and credit decisions are “solid as a rock,” he adds, “but when it comes to the foundation of the technology platform, that's something that's always a challenge for banks and bankers. We’re actively upgrading everything we have now, but that’s how it goes with every organization.”

The flip side? With so much emphasis on fintech platforms that use artificial intelligence and big data to automate financial decisions, banks, Chillura says, run the risk of losing the personal touch that promotes customer loyalty.

“If you really know the client, you can articulate what the challenges and risks are,” he says. “A lot of banks and fintechs think you can ‘artificially intelligence’ your way through credit decisions, but character is a big factor in how banks succeed or don’t succeed from an asset quality standpoint. Technology can get us to a certain point, but ultimately, you’ve got to have somebody at the wheel.”

In the current era of rapid inorganic growth, technology can also interfere with how well mergers and acquisitions are executed. Chillura says it’s easy for banks to take lose focus amid expansion.

“Focus on the customer instead of all the other baloney,” he says. “That’s key to any acquisition. What happens is you get all these consultants and technology people, they talk about all this other stuff, you know, ‘We're gonna migrate into this new core, we're gonna do this and that and you're gonna have PCs that run Salesforce.’ It’s all noise.”

Rogers espouses a similar view, saying there’s no way technology can truly replace the personal relationship between banker and client.

“Your banker is your advocate, particularly in uncertain times, when interest rates are rising, when prices are increasing and human capital is more difficult to attract. We always say that a good crisis is the best way to separate the best bankers from those who are doing it as a job vs. being passionate about their career. When there’s a little uncertainty, you can separate yourself from the pack, with empathy, service, accessibility and advice.”  

What really matters, Chillura adds, is maintaining contact with clients and ensuring you meet their needs during the transition from one bank to another.

“Make all that other stuff secondary,” he says. “That’s the key. Banking is a very simple business that a lot of people tend to mess up. They look at it as something different than what it really is. We’re in the service business. People think we’re lending money — no, we’re providing a service.”

(This story has been updated to clarify Joe Chillura's role at USAmeriBank prior to its acquisition by Valley Bank.)