Michael Mettee (CFO, FirstBank) on the future of financial technology in the banking industry

hi I'm Tom steenberg I'm the dean of the Owen Graduate School of Management and today I'm I have the great pleasure of having Michael MTI with me he's the CFO of First Bank it's really delightful to have you with us today thank you for having me Tom yeah so um I'd like to start with just a question uh about your your background in your career maybe you could tell us a little bit about yourself yeah I mean I I'm a the the CFO First Bank obviously as you said didn't didn't start off on a kind of traditional Finance track actually when I graduated from from college back in 2002 I wanted to job doesn't even exist anymore I wanted to be a stock broker right and so um TR tried that it was right after 911 uh wasn't successful you know getting a 22-year-old to raise money try to get money from uh from people right after 9/11 with the stock market crash went into some Financial advising didn't really work so well and just walked into a job fair at Old am South Bank in Birmingham Alabama and really uh because I had a a background in trading or at least Series 7 type stuff went into Capital markets and spent the first prob 10 10 plus years or so doing Capital markets activities trading and uh mainly around mortgage and uh lot there's a lot of inter ing stories there which we don't probably have time to get into but um I actually ended up getting my NBA through the executive program at Alabama in about 2010 which really changed my career trajectory and pushed me more towards a finance holistic management uh type of background and so I join do do you think that's something you would have done anyways um you know it opened my eyes it it it really changed the way I thought about uh business banking and and surprisingly it changed the softer side of me I was a really driven hardworking person that had zero empathy um and so it it was it was always interesting I would always outwork people but I I didn't really understand how connections worked how people worked how leadership worked and so that NBA uh really changed it and a lot of people when they get to NBA think about W it's going to it's business and it's you know uh and of course I'm not a traditional out of Finance background um but it opened up the HR side to me the management the leadership side all the people skills yeah and and so it it's very impactful for me and I was at bbba Compass at the time in Birmingham Capital markets was in a transition for mortgage during the financial crisis uh and and if you remember uh there was a financial crisis then Europe had a financial crisis I liked it so much I did both and so I impeccable time yeah impeccable timeing so I moved more into the finance world uh and and then you know it it was a tough time in the world economy and I was working a lot of hours had had a our first child and so that changed perspective again and I I just happened to me on the phone one day with someone up here in Nashville and they said hey you know first bank's looking for somebody to start a capital markets area well I didn't you know I never heard of First Bank I've been at $120 billion Banks $160 billion Banks and here I am looking at a $2 billion asset Bank in Nashville turned out that it it was a really exciting Endeavor uh I kind of looked at it I said hey I can build something here I can take something make it my own start it from scratch little bit of entrepreneurial which you also learn in NBA is hey this entrepreneurial thing sounds pretty cool uh even though I didn't have to take any real I you take career risk but I wasn't I wasn't taken a whole lot of risk otherwise so that was really exciting and so we relocated up here in in 2012 from Birmingham to to Nashville we actually live in Franklin um and so I I was part of the the migration of our company from west Tennessee to Nashville and we relocated our headquarters here in 2016 uh same year went public so while I was doing Capital markets type activities which is commercial interest rate hedging and mortgage servicing rights hedging and mortgage hedging and selling and buying loans uh we got to participate in in going public which was a Monumental kind of project for somebody that's kind of earlish midc career type you know you're in your 30s I guess that's early career still right um and just I got to do things in a big way for a company that was growing that you don't get to experience at the larger institutions and so uh we we built a a really strong Capital markets and mortgage area over a decade well you know things change right and uh I kind of got back to saying Hey I want to do something a little bit more towards that Finance skill set uh and so I became the the CFO of our banking division in 2019 we were getting out of some of the non-traditional mortgage stuff I helped sell some of those businesses moved back into the banking side working on um you know traditional finance things this this may be surprising but I think it's a lot of evolution of banks but also any company is finance is not a skill or a function that most businesses have you know they have accounting right they they they balance the the debits and credits they work AP but they're not financing I'm a finance guy right I'm I'm strategy forward-looking I'm not an accountant I have really good accountants right to Shore that up um and so was going down that path well coid hits you know uh it's early 2020 we just announced the largest merger uh in in our company's history we were about 6 and a half billion uh Franklin Financial out in Williamson County is about 4.8 billion and I'm I'm one of the only people at work right because everybody's gone home yep uh my wife said Michael better off in the office you know but I talk a lot I talk on the phone a lot I Pace you know we've got a kid trying to learn from home we have two other children by this point both toddlers so I you know I got the exemption to go to the office every day and I'm sitting in my office it's 4:00 on a Friday and our CEO calls me and I'm like huh well this could be bad you know turns out our uh our holding company and uh my boss CFO had taken a job in Texas known event they were working on it for for three or four months yeah um and he said hey you need you to be the interim CFO you it's four o'clock on a Friday you kind of sit you I'm kind of one of those people that just if you if you ask me to do something I'm I'm going to do it as long as it's ethical and moral and I said sure Chris uh I'll do that uh I love that mindset that's so great well yeah some was being naive right but so so yeah I'll do it and he said well we'll talk Monday think about it over the weekend about what that means I pick up the phone and I call uh the the guy that brought us brought me into the bank which his name is whb Evans been with the company 36 years I said whb you know what what exactly did I just get myself into you know keep in mind this is April we just hit Co we're announcing earnings in three weeks um I'm I know the company really well right 10 years I know every aspect but I hadn't been involved with the accounting side or the investor relations and that type of stuff uh all the things that a public company CFO is really responsible for the you know KS and q's and disclosures and um and so they they said you'll be fine we would talk through it and so Monday morning I hit the ground running as interim CFO they searched uh did a nationwide search for the best candidate which I knew the whole time what we were doing you know there was no preconceived notion that it was me or not me uh in in about October they ran out of candidates and they offered me the role and so uh on your way uh on my way and it was you know in the middle of the largest integration uh in our company's history we actually did two mergers in 2020 um we call them Partnerships and then we uh we did a $100 million sub debt offering you know we we did a lot of really great things it was actually I was still in charge of capital markets as well we made $100 million in mortgage through through a lot of those activities and so it a tremendous ride and now now it's really been uh the most exciting three years of of my career I mean and it's more about Community banking is so great because these things don't matter relationships still matter and I get to go out and I got to meet meet with customers I get to be part of the Vanderbuilt partnership I get to go out and meet with all the Business Leaders in town and I get to travel the footprint so it's really really exciting and a great place to be yeah that's that's one of the things that really um when I was thinking of this uh career change and thinking about changing jobs one of the things that got me very excited about Nashville is just the possibility of collaborating with all the businesses and in town um I like to say that I'm within two miles a walking distance of you know dozens of corporate headquarters it's so easy to be involved with with businesses and um I love that we have a relationship with First Bank could you could you tell us a little bit more about that relationship and how you see our partnership um involving why it's important to First Bank yeah I think our relationship and evolving relationship is a mic microcosm of Nashville and and that people are very welcoming we like to do business with Nashville nashvillians people like to do business together uh and even in some of the more like competitive uh environments you know bank to bank or things like that people are all very civil all willing to help they're going to compete they want to beat you every day y uh but look that you know there may be somebody at a different University or bank that's like hey Michael let me let me tell you how we would do this and see if that helps you and so you the V build partnership came about over the last couple years and we we've obviously looked at Vanderbilt and said hey you know what a pillar of the community uh I think as y'all were out uh you you've had a lot of banking relationships you're looking for uh a community partner we love to be associated with with the Vanderbilt name and it's more than just you know it started with with that Athletics and in the stadium right you know hey this is a great idea naming rights but as we got together and over months of talking about hey should we do this Stadium naming rights still it really became wow we are really like-minded organizations um Community Builders partnership being good stewards of Nashville and the surrounding area and now it's about hey what kind of relationship can we build and grow uh Nashville and the state and the the southeast yall are Universal brand right um You Vanderbilt's known all over the world and so uh that that's really exciting for us and so we want to be here we want to be doing these things we want to be working with your students uh the professors the staff and you know if some of the some of the kids St it's like hey how can I buy a house and five years where can I do an internship uh you got new people on campus and I've never had a checking account how how can we help that financial literacy giving back um to the community is also very important to to both of our uh institutions and so there's just a lot of community type stuff that that really works well and then yeah I love the civic-minded nature of your business and your organization in particular and that mindset of helping the community grow by working together by finding you know solutions to common problems things where we can really uh make a difference here and all benefit from I think it's terrific yeah we we really feel like local matters and and for us that's local decision making but being in your community um and so that when you come to see whomever at First Bank that that you need something done that they they can make a decision right there for you yeah and then also when you see them at the grocery store or church or you know Second Harvest that where side by side working uh and bettering the community it's that's very important so so you mentioned early your your mindset towards strategy and thinking about growth and you've certainly been in a period that that you find exciting around um about growing um First Bank I find the same opportunity here to be very exciting for me um as you look to the to the Future and what's happening in Industry where where what are some of the interesting things Trends you're seeing in the industry what are things that you might um want to act upon uh within that within that background so so three years ago we sat down in our strategic planning meeting as as late 2020 and and we have a a guy on our team who's worked with y'all's wry Department his name's Wade Perry and he's our chief Innovations officer that did not exist at First Bank three years ago the department the job uh doesn't exist in most Community Banks in in the US so we're a little bit uh out the I don't say the RIS scale there we're we're a little bit ahead of where other Banks like us are um and the reason for that is we looked at the environment around us and you said you know the our bank was founded in like 1906 right Chim you know in three years added 14 million customers all right so let's just say we have I'll call it 350,000 customers so in 120 years right we got to to 300,000 and in 3 years they got to 14 million and what do they offer a checking account right you know it's not even uh you'd say well that's not even Innovative I mean but the ease of business the financial technology uh our children will never go into a bank branch it likely might have to but uh but but when they get older it's a requ it's a family requirement yeah I mean you know so they've been in and they enjoy it but you know that those things are changing the Dynamics are changing uh our our business is based off of which was very important by the way in March and the last couple years or last couple months FDIC insurance right that people bank with banks for FDIC insurance or for loans well even even lending has become commoditized in a lot of ways people can get Consumer loans through all types of financial technology you can commercial is a little bit harder you know that's where these relationships in and around still make a lot of sense and people work through it but for a retail customer they they can get generally Bank products anywhere and so we decided hey we better we better move forward on this we better figure out how we can provide you the same thing that JP Morgan can but the same thing that chime can or other technology you know PayPal or whatever else moving money uh so so that's what we've been doing the last three years is and just make it easy for the customer to do business make it easy to do business still have the ability to talk to people you people still matter yeah and I think um you know when you have a Fint when you have your phone and you can move money from A to B really quickly I think that's all well and good and that's how most of people prefer uh to operate especially in the younger generation but when something goes wrong they don't want to be on hold for 3 hours uh they don't want to be dealing with you know email back and forth and no human they want to be able to talk to somebody so that that's really still a value ad for banks in general um but making it easy so what we figured out is have we better partner with people that are more Innovative than us that invested in this technology or or that have invested in U Innovation uh we're not developers right so let's go find really smart people like at the Wonder Center let's go find them and see how we can partner who has good ideas so we've done a lot of that and and honest just scratching the surface yeah and it's really exciting and traditional banking still matters too um you know in West Tennessee we have lines out the door to get in our branches still and it's exciting and you know you still know everybody's name but these communities we talk about communities it can be a region it can be a market but it can be a a type it can be professors at vanderbild it's a community and how do we serve them and so trying to just rethink banking in a lot of ways yeah I love I love the the thought process that you have in that there's a lot of different ways to imagine how this business could go and we're going to try and capitalize on the trends in terms of making it easy for people to do business for us and we'll think about doing business in a very different way to capture those markets I think we we probably all would say if when companies make it hard to do business yeah you're probably going out of business I mean it's and I mean nobody nobody wants to do business with somebody it's difficult and and you have choices in banking yeah I mean there's a lot of choices and now there's a lot more choices through financial technology is there anything else that you're leaning into that you could talk about I imagine you might have some things that you can't talk about too so I'm ask that uh it's it's interesting on in in banking in general and this is more of a commercial tilt is a lot of deposit flows right uh over the last 6 months have moved out of bank uh given the Silicon Valley Crisis people really worried about uh who their bank counterparty is and and what that looks like interesting Dynamic there is they move a lot of money to financial technology firms why why are they doing that well it's ease of use it's better there's there's treasury uh management platforms that I think are very easy for startup companies or small to midsize businesses that just more flexible than Traditional Bank treasury management products meaning they can move money to CDs or t bills or money market or operating accounts banks have not been that great at that uh so we're working with a couple firms actually a couple Vanderbilt graduates even um on partnering and to how we provide better Services through that the the interesting thing is you know your company goes and says hey this is a really attractive offering I'm going to go put money in this financial technology company well what does that f fintech need they need a banking relationship to then go put the money in deposits so money is moving out of deposit out of banks traditional Banks into Financial technology companies and they don't have the ability to just hold it so they're moving it back into Banks and so we're trying to figure out hey let's partner with these guys you know Tom used to be our customer um now he's over there well this is a way for us to continue to build continue that relation and so and it's a win-win really I me you're getting better technology we're partnering with these guys and uh a lot of deposit flows have left the banks and so that's that's really top of mind we we look at a lot of uh partnership Financial Technologies to build efficiencies you know AI really obviously a big topic um we're not I'm in the AI test group I would say uh yeah because because I said hey I got to be I've got to understand this but you know we're doing some of the more traditional Robotics and um type stuff we have some in-house people that do that just to process automation but a lot of our Innovation stuff is centered around is this a product that we can you know replace something we're doing that we can have some equity in uh does it help our communities you know if it's a lending product and and can we are we good at it yeah and and can we enhance that um or you know is this something that that we can monetize that is banking related I mean we're not out investing in you know EV technology or anything so those those types of things we we get a lot of uh early stage uh startup type stuff comes our way because once your name's out there you get a lot of it and so we we as a team probably evaluate you know God there's probably been a hundred in the last year of just people coming to bring stuff a lot of good ideas you have no idea which ones are going to hit right yeah um so but it's exciting it's just different than traditional banking so you taking a portfolio approach for that in terms of managing the the future or or how how do you how do you make sense of that yeah it's the process and I'll tell you we're early in it we're we haven't done a ton of it because we are still a Community Bank it it's a risk management like core risk so look it's you don't just pivot um we set aside some capital and said hey you know let's let's look at what we could do here in in this space uh we made an investment actually fairly sizable investment in a company called Zippy Technologies which focuses on manufactured housing uh loans which you know in a affordable housing crisis um you know they provide technology that resource you can close your loan in in like s days the traditional MH space that takes about 90 yeah so you get people in it's cheaper it's faster it's a better process we can then put some of those loans on balance sheet uh and so we can get we retain the customer we get you obviously yield there um so then on the smaller stuff so that was a big investment on the smaller stuff it's more of a portfolio approach and we'll we partner with uh some technologists and some people that have done some funds and say hey where should we be on this and it goes through a rigorous process right I mean um it's it's rigorous probably more rigorous than the team that's in charge of it would would appre they appreciate it but there's a lot of governance yeah we're at the end of the day we are a bank yeah yeah that makes a lot of sense to me um I have another question for you um just listening to our our conversation um you know just thank you for for spending time with us um today one of the themes that has struck me about your comments both in your personal journey and how you thought about the MB you know your MBA and what it brought to you sort of a transition um in in appreciating the people skills involved in your own career and then as you're looking at the markets you're like very customer focused and people focused I was wondering if you have any advice any leadership Les lessons that you'd share with um with our viewers that you've learned through your career like what what advice would you give in terms of of development yeah I you know I touched one one of them earlier is we were talking about when hey will you do this I I've always been willing to take the next thing on um and and I think it's important that you play a little bit of the long game when you think about your career and so so many of us get caught up in well Tom's asked me to do this you what's what's it going to give me in return right right and not understanding opportunity right so so maybe not maybe you know was I qualified to be the CFO of First Bank in April of 2020 well you know I didn't just say sure I'll do it give me a raise and all this stuff right it's like no wait first of all it's going to be a lot of hard work you you're you're always trading something off right whether it's family time friends um and so but you got to embrace it and and realize that sometimes things take a while to pay off and I think that that's happened for me I think it's important you know our CEO says this all the time it's important to manage your career right I can't expect you to manage my career for me so as you sit out or you sit out and you think about hey what is it I want to do what is it I want to be um you know it's important that you take the Reigns for it I think a lot of times I see people come to me and say Hey how do I get to be be the CFO of First Bank and I embrace that I want somebody to come take my job you know like that means I'm doing things well and and but but my path is not your path and so we it's it's not a straight line it's squiggly and we can get get you there uh but but Embrace that I mean I think that that's okay you don't have to go get it you know go to this school and get this degree and then get this degree and then go to Big Four and then you know you don't have to do that and so let's let's figure it out Mentor um I think you mean they should come to vanderbelt well all that can happen in Vanderbilt um so absolutely but I think you you just all of that is you got to manage your career yeah and then the one of the other things is and this is a a mentality that we try to maintain is the closest to the broom sweeps the floor so there's not not a single job I would ask any of my people to do that I'm not willing to do you know if we're at an event and there's trash on the ground you know let see if I pick it up right you know if if you need help finding your seed at First Bank Stadium well let you know help just look let's remember who we are remember what our parents taught us let's be good people um and and there's no there's no reason to not ever do that and and it it just really always bothers me when people say well it's not my job I mean well I just don't I don't it's sort of all our jobs yeah I don't get that I think that you you build your team uh and and everything around you your company and your culture by be willing be willing to do the hard work the easy work the you know everything in between and and lead by example and then hire really good people that's the best way to be successful is hire hire people that are are smarter than you that that don't fit you know if I hire a bunch of Michael matz we're not going to be successful right you need people that compliment your skill set that are better at their jobs than you were at their jobs and then you listen to them yeah right I told my people I hired you so you tell me what to do not for me to tell you what to do I love those pieces of wisdom yeah well thank you so much for being with us today Michael I really appreciate your time you've been very generous thank you for having me yeah thanks appreciate it Tom

2023-11-14 00:16

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