When Robert Schneckenburger and Jeff Gould left their respective positions as market president and senior vice president at Chase Bank for Whitney Bank earlier this year, it sent shockwaves through local banking circles. Together, the executives had more than half a century of experience at Chase, and both were closely identified with the city’s largest financial institution.
But while their move stunned many in the local market, far more surprising is the ripple effect it created. Since Schneckenburger and Gould’s departure from Chase in early March, more than a dozen upper-level banking executives in Baton Rouge have also left their positions at various banks for competing institutions.
As Business Report explores in its latest cover story, “The Domino Effect,” the wave of executive swaps is unlike anything anyone in the local banking sector has seen in recent memory, and it’s more than mere coincidence. Rather, a couple of distinct factors are at play.
One is a change in the way Chase does commercial banking in tertiary or midsized markets like Baton Rouge. In recent years the megabank has gradually shifted power and resources out of those smaller markets, consolidating them in larger cities like Houston or Dallas.
At the beginning of 2016, the bank’s corporate office took control of several corporate clients away from their local, longtime bankers in Baton Rouge and transferred them to Texas. The departure of Chase bankers began soon after, setting in motion the domino effect that would follow.
The second issue is broader and has to do with a relative dearth of talent in the banking industry, both locally and nationwide. Since the late 1980s, banks have pulled back on the kinds of costly, institutional training programs that once were the standard for young commercial bankers. As a result, there’s a lost generation of bankers and fierce competition for a dwindling pool of aging talent in a market with an ever-growing number of new financial institutions.
The implications from all the recent changes are potentially far reaching and could shake up the balance of power in the local market for years to come. Banking is about relationships, and banking customers like to do business with people they know and trust. How many companies will sever ties with their banks to follow their bankers across town is anyone’s guess at this point, but there is evidence some moves have already begun. More will follow.
“There’s potential for a lot of change,” says Jay Montalbano, a partner with the local accounting firm Hannis T. Bourgeois. “A lot of companies are sitting back right now, testing these new relationships and trying to figure out, am I going to stay or am I going to go?”
Read the complete cover story, and a related story on what some organizations and institutions have been doing to pick up the slack in the years since banks curtailed their training programs.
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