In 2013, Andy Schornack became one of the nation’s youngest bank CEOs when he took the helm at Minnesota-based Flagship Bank, headquartered in the greater Minneapolis area. Before that, he had risen rapidly as a business banker in community banks, navigating the fallout of the 2008 financial crisis. In 2019, he added another job as president of Security Bank and Trust in Glencoe, Minnesota. Schornack spoke with the ABA Banking Journal about cultivating career paths for rising leaders in community banking—and other topics. Listen to the full conversation.
Q What drew you into banking, and what’s kept you in banking?
A After college, I went directly into an MBA program here in the Twin Cities, and I was able to get an internship with a local, newer community bank. It was growing, back in ’06 or ’07, right before everything went haywire. What we deal with on a day-to-day basis, in terms of the lending and asset quality, got me excited, and I jumped in with both feet.
What’s kept me very interested in the banking space is that there’s a lot of challenge in that community banks are often described as being on their last leg. To me the underdog stories are energizing. And I think we can really show how we can be true to our traditional relationship banking roots with new technology and really show growth, while still providing reliable, predictable and creative ways to help our clients meet their goals—and do that profitably, with a good return to our shareholders. My goal and my continued path at both organizations is to prove that thesis out.
If we continue to execute on our strategic plans and on our goals, that’s what will happen over the next few years. I’m still young; 37 years old sitting here in front of you today, so I’ve got a long pathway in this job.
Q What is it that community banks do well to find new leadership and develop talent?
A I’m grateful that I worked for ownership that also got started in banking at a young age and was willing to take an opportunity or a risk with me and put me in a leadership role. As I look forward, I think we have to be cognizant and really thoughtful about providing stretch opportunities for younger talent that show an interest in banking—that they have a passion for banking—and really allow them to take on some opportunities. I think that’s where sometimes we get so risk-averse as an industry. There are a lot of things we’re doing on a regular basis where we need to have those guardrails and controls in place, but we’re not deepening the talent pool to a level that is allowing some of our newer bankers opportunities to shine.
I was fortunate enough somebody was willing to do that, going back to when I first got into banking and had a lot of responsibility at a pretty young age. I’m trying to make sure that I’m continuing that path. As our organization grows, we do some things that maybe are old-school that I still think provide value.
We still have group credit committee meetings where we bring in the credit analysts and the lenders and sit down and talk through all the loans, and that provides transparency across lenders. I think it provides a lot of opportunity for younger people to ask questions and understand, whether in the meeting or outside of the meeting. Many have gotten away from having these group discussions, because it becomes more time-efficient, but we’re losing out on that training and that information dispersion across our credit teams. And I think that that’s been a valuable way for us to improve the depth of our team.
Another thing that we’ve done is new projects. Since 2013, we’ve acquired banks; we’ve done core conversions. We’ve done online banking changeovers. We’ve rolled out online account opening at Flagship, improved our cash management. This has allowed younger people to take on bigger roles in all those projects, let them take on a little bit more responsibility in executing those changing plans. Obviously, you can always have guardrails and oversight. I’ve been trying to empower younger bankers and developing bankers to take on roles and allowing them to run in an area that they see as interesting—where maybe the downside risk to the bank isn’t that large—as we’ve done these projects.
We try to be transparent among our groups. I think there’s been a ton of value in not only the execution of the plan or the changeover, but also in the understanding of why we do the things we do. In banking, some of that can be unknown when you first get inside. Trying to bridge that gap and allow people to understand why we do what we do also strengthens the team.
Q With all the small businesses at risk or closed down due to the pandemic, what does that mean for the future of community banking if we see a secular shift away from small business as the driver of U.S. growth?
A The change in how we do business has been a struggle for us as bankers, especially banks like mine where our lifeblood is tied to the strength of the local real estate economy and the small business economy. We’re trying to work through ways to make sure that we provide tools and resources to all of our clients to make it through the next, 12 to 18 months. You want to make sure you’ve got a pathway through 2021.
For most bankers, and particularly community bankers, the Paycheck Protection Program was a major program for their clients. We jumped in and tried to work through that process. We recently rolled out a 2 percent loan program at Security Bank and Trust for McLeod, Carver and Sibley counties as a way to help our businesses as they need to upgrade equipment or improve their properties. They’ve got access to capital at low rates to work through this in a way that hopefully can help them weather the storm.
One thing we’ve been surprised to see is relatively stronger financial footing than I would have anticipated at this point, but I think we’re all nervous. There are still moratoriums on different activities, and Minnesota is different than the rest of the country. Our unemployment rate right now is in a better position than the national average. And we’ve got a pretty good core, particularly in the Twin Cities metro area, of employers that are actually doing quite decently, which is helping our local economy weather this maybe a tad bit better than you might see on a national scale.
But we’re trying to make sure that we’re touching base with our client base, communicating that we’re here if you’ve got questions, we’re here to work through some of the opportunities that are out there for you. Support for small businesses and understanding the real estate dynamics in our economy are linchpins of our banks’ ability to continue to succeed.
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