BB&T CEO Travis Rhodes Interview

Thank you for having us. Glad to see you, Don.

Yeah, Don. Thank you. Our world has changed, as you know. COVID has impacted all of us. There's been some good green shoots that you've seen, some companies that have really done well. As you know, there's been a lot of people that have been hurting. Anytime you take an economy and slow it down the way that we have, the impact that that's going to have, especially on some of the business banking, the smaller businesses, some of the people that are restaurateurs, has definitely hurt. It's hurt everyone from an economic standpoint over the past six months. There's been some good things that have happened, though. You look at the PPP, the Payroll Protection Program that was rolled out, and how the banks really rallied around that and around their clients, wrapping their arms around them. I think about the 18-hour days that we were doing as an organization, thinking about how we then invest into our clients by helping them get these PPP loans. The commercial banks were really on the front lines of that process. I think it was actually very smart the way the federal government used the existing lending structure with the banks to deliver that money in the crisis to those who needed it.

Yeah, one of the things that we did, we were very fortunate. We were the fourth largest producer of PPP loans in the nation. Then you just look at the impact that we had in our region here. There's over 700 million dollars and over 2500 companies that were helped. We were very happy about that. As we were working through the night, we would stick pictures of a client that we helped and put their employees up on our screens and sending it all out and saying, 'These are the jobs that you saved today.' They worked, looking at their mission statements, a little bit about their company, their website, just so we could all kind of rally behind that and the companies we were helping. Because we were pulling some long hours.

Yeah, there's a big merger happened last year. SunTrust, about two banks, 250 billion dollars in size, came together. SunTrust out of Atlanta, BB&T out of Winston-Salem came together to form Truist, now the sixth largest bank in the nation. It's an incredible merger because the two companies married together so beautifully. The things that we focused on complemented each other versus competed against each other. Bringing these two organizations together has increased our ability to serve our clients in a more strategic, advisory capacity. It allows us to bring some things that are typically only given to Wall Street-type clients down into the middle market, into Main Street. We believe wholeheartedly in the community bank model. As we built this merger between these two banks, we committed to staying local. You've got a big bank that delivers locally through 24 separate regions. Each one of those regions has a regional president that reports to the C-suite of the organization, which allows us to be very close to our communities as we begin to make those decisions, make investment decisions. How are we going to invest into our communities close to our clients? What do our clients need? How can we touch them and serve them in a capacity that brings all the power of a large bank but still delivers and feels small and local? That's what we're striving to do.

That's right. We'll actually do all of our client conversion in 2022. As you know, we were looking at doing that in 2021, but there was a little thing that happened called COVID that sort of threw things off a little bit and delayed us. We just threw the weight of our organization behind how to serve and help our clients and our communities through this time frame that we're going through right now.

Yeah, I'll be about three years. Actually, 21 years with BB&T. Born and raised in North Carolina. Grew up in Greensboro. Married a girl from Winston-Salem. Both of us lived in the Triad area for a while. Then five years before coming up here to Eastern Pennsylvania, I lived in Charlotte. We were in Charlotte for five years until 2018 when I got the honor and joy to be able to come up here to Eastern Pennsylvania. So five years now transitioned up north into Pennsylvania.

Yeah, we love it. Even my kids will say they love it here better than North Carolina, believe it or not. That's... how old are the kids? I have four: a 25-year-old, a 19-year-old at Penn State, a 15-year-old, so you're fully in gracious.

Yeah, yeah. That's right. We are. Yeah. The blue and white. Unfortunately, this college football season is going to be a little odd.

Yeah, so it's a disruptive market right now, of course. I think you can continue to see some consolidation in the banking industry. The economy is challenged, as we all know. We're pouring a lot of capital, a lot of liquidity into the market right now. There's a lot of money flowing into the economy which is keeping us elevated, keeping us able to continue to move forward. Interest rates are driving home purchasing. So I continue to think it's going to be harder to compete unless you get some economies of scale. I think there are some challenges that are going to continue to face the financial services industry. Margins are razor thin right now. Efficiencies is where you have to really build out to continue to have the capital levels needed.

Yeah, we couldn't have envisioned a scenario where it could be even more perfect than what it was for us. From an organizational standpoint, it also allows us to invest deeply into technology. That's one of the things that our CEO talks about: T3, how do you marry touch, this personal touch, with technology to ultimately form a deeper level of trust with your clients? We call it T3 to really elevate our organization. It's got to be both. Some people are doing truly a technology play; others are playing truly on the touch side of it, which you know some of the smaller maybe.

We're committed to the branch banking system. We're not going to abandon that. That is the bedrock of touch, somebody being able to go and meet with one of our teammates at a location.

Some of that, in the world, which makes sense. Our clients are the ones making those decisions. We're not making those decisions. If our clients are visiting a branch and they're seeing our teammates there, then that's a branch that is highly active, someplace that we need to keep. But if there's very low activity in a certain branch, that might be one that we have to think about how to invest into another delivery method that's ultimately going to meet our client where they want to be. At the core of everything we're talking about is where does our client want to do and transact business with us? How do we serve that? We're going to invest wherever that is to meet their needs. That's really part of the culture of BB&T.

Sure. Our core mission is to inspire and build better lives and communities. That is our core purpose. We state that that is our whole reason for existence: to inspire and build better lives and communities. To do that, you've got to invest into that. As an organization, we've invested deeply and continue to invest deeply into our communities. Through the COVID crisis, we invested over 50 million dollars just in direct COVID relief. Then you think about our employees and how we gave one-time bonuses to our employees to help mitigate the downturn and impact of what COVID was bringing. We gave free child care for our working teammates that maybe couldn't have someone to take care of them. Directly in the Lehigh Valley, we've invested close to half a million dollars into COVID relief, such as... I remember very early on, like two days into the COVID crisis, I called Tony Iannelli and said, 'Tony, how can I help you? What can we do?' Then he began building a fund through the foundation. So we invested in the food banks, invested in literacy programs, invested into technology plays to put technology into people's hands.

Two full floors there. So we're about 150 to 200, depending on how you want to count that. We've got a lot of different divisions. We've got our insurance division that we have up here; we've got a credit hub that's up here; we've got a branch network that's up here; we've got a commercial and corporate team that's here as well. You can slice and dice it a lot of different ways, but anywhere between 150 and 200.

Yeah, so I say I'm responsible from Scranton to Cape May. So larger than just that. He's from PA and New Jersey.

So you mentioned a couple of things earlier that I think are very important. You look at the manufacturing facility, food and beverage, transportation, the logistical hub that this area is. This is a tremendous area. Look at what you have right behind us, you have a lot of historical manufacturing here, but how this region has basically reborn itself and has really transformed itself, thanks to a lot of the work that you do and a lot of people have done here. To me, this is one of our hubs, one of our core strategies. For the region, we've got a greater market share here than we do down in Philly and in that Delaware Valley. It is important to us to continue to invest into that and to continue to grow that and to continue to be seen as that corporate partner that can bring a lot of value to the Lehigh Valley. A lot of the boards that I serve on are here in the Lehigh Valley. A lot of investments that we're making, bringing talent into this area, is a continuing testament to our desire to continue to be successful here. When I first came, and again I get to stand on the shoulders of some great people. There's no way that you can replace a Scott Fainor. This guy's former chair of the board of Lehigh Valley Economic Development Corporation for two terms. So I get to stand on his shoulders, not as a replacement, but he has brought this organization this far. How do we stand on the shoulders of him and continue to build on that legacy that we have had?

Yeah, here we're second. Combined banks about 500 billion dollars, the sixth largest institution in the country. But in Lehigh Valley, second market share.

My perspective, it's our model; it's the way we go to market. A guy like me is responsible for this marketplace, and all roads lead through him in the market. The decision-making is not being done in North Carolina, or Florida, or Atlanta, Georgia; it's being done here.

The point of entry for any of that for a company in the Lehigh Valley is going to be their local banker, their local relationship. When you think about a larger bank, sometimes it can feel very transactional. We want to take away the transactional feel and have a relationship. The relationship banker's job is to navigate our bank for you. It's not your job to navigate our bank. It's our job to understand and have an intimate relationship with our client to understand what their needs are and then begin to pull solutions from that. That can be anything from insurance to wealth management to personal services to investment banking services, such as if a company wants to have a liquidity event and either transition to the next generation or sell. We can handle any and all of that. If there's a recapitalization that needs to happen, we can handle that. As Truist, we have a suite of products that is second to none, unmatched.