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

Thank you for having me, Tom.

Yeah, I mean, I'm the CFO of FirstBank, obviously, as you said. I didn't start off on a kind of traditional finance track. Actually, when I graduated from college back in 2002, I wanted a job that doesn't even exist anymore. I wanted to be a stockbroker. Right. And so I tried that. It was right after 9/11. It wasn't successful, if getting a 22 year old, to raise money trying to get money from, 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 AmSouth Bank in Birmingham, Alabama. And really, because I had a background in trading, or at least series seven type stuff, went into capital markets, and spent the first 10+ years or so doing capital markets, activities, trading, and mainly around mortgage. And there's a lot of interesting stories there, which we don't probably have time to get into, but I actually ended up getting my MBA to the executive program at Alabama, in about 2010, which really changed my career trajectory, and pushed me more towards the finance, holistic management type of background. And so

Um, you know, it opened my eyes it, it really changed the way I thought about business banking. And, and surprisingly, it changed the softer side of me. I was a really driven, hard-working person that had zero empathy. And so it was it was always, I would always outwork people, but I didn't really understand how connections worked, how people worked, how leadership worked. And so that MBA really changed it. And a lot of people when they get an MBA, think about, it's business. And of course, I'm not a traditional out-of-finance background. But it opened up the HR side to me the management, the leadership side.

Yeah. And so it was very impactful for me. And I was at BBVA Compass at the time, and Birmingham, capital markets was in a transition for mortgage during the financial crisis. And if you remember, there was a financial crisis, then Europe had a financial crisis. I liked it so much. I did both. And so I

Yeah, impeccable timing. So I made more into the finance world. And then, you know, it was a tough time in the world economy. And I was working a lot hours had had a, our first child. And so that changed my perspective, again, and I just happen to be on the phone one day with someone up here in Nashville, and they said, 'Hey, FirstBank is looking for somebody to start a capital markets area.' Well, I didn't, you know... I never heard of FirstBank. I've been $120 billion banks, $160 billion banks. And here I am looking at a $2 billion asset bank in Nashville. Turned out that it was a really exciting endeavor. I kind of looked at it, I said, 'I can build something here. I can take something, make it my own, start it from scratch.' A little bit of entrepreneurial, which you also learn in MBA is, 'Hey, this entrepreneurial thing sounds pretty cool.' Even though I didn't have to take any real - you take career risk, but I wasn't taking a whole lot of risk otherwise. So that was really exciting. And so we relocated up here in 2012 from Birmingham to Nashville, we actually live in Franklin. And so I was part of the migration of our company from West Tennessee to Nashville, and we relocated our headquarters here in 2016. Same year we 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. We got to participate in going public, which was a monumental kind of project for somebody that's kind of early ish mid-career type. Yeah, you're in your 30s I guess that's early career still right. And just I got to do things in a big way for a company that was growing but you don't get to experience at the larger institutions. And so we we built a really strong capital markets and mortgage area over a decade. Well, things change, right. And I kind of got back to saying, 'Hey, I want to do something a little bit more towards that finance skillset.' And so I became 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 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? Yeah. They they balance the debits and credits. They work AP, but they're not finance and I'm a finance guy, right? Um, strategy, forward-looking. I'm not an accountant. I have really good accountants right to shore that up. And so was going down that path. Well, COVID hits. Yeah, it's early 2020, we just announced the largest merger in our company's history, we were about six and a half billion. Franklin Financial is, about 4.8 billion. And I'm, I'm one of the only people at work, right? Because everybody's gone home. Yep. My wife said, Michael, better off in the office. I talk a lot, I talk on the phone a lot. I pace, you know, we've got a kid trying to learn from him. We have two other children by this point. Both toddlers. So you know, I got the exemption to go to the office every day and I'm sitting in my office, it's four o'clock on a Friday, and our CEO calls me and I'm like, ha, ha, this could be bad. It turns out our holding company and my boss, CFO, had taken a job in Texas, a known event they were working on it for for three or four months. And he said, Hey, I need you to be the interim CFO. It's four o'clock on a Friday, you can sit you know, I'm kind of one of those people that just, if you if you asked me to do something, I'm gonna do it as long as it's ethical and moral. And I said, Sure, Chris. I'll do that.

Yeah. Well, yeah, some of it's being naive, right? 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 the guy that brought me into the bank, which his name's Wib Evans been with the company for 36 years. As a Wib, what? What exactly did I just get myself into? You know, keep in mind, this is April, we just hit COVID. We're announcing earnings in three weeks. 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. All the things that a public company CFO is really responsible for the Ks and Q's and disclosures. And so they they said, you'll be fine. We talk through it. And so Monday morning, I hit the ground running as interim CFO they searched, did a nationwide search for the best candidate, which I knew the whole time we were doing, you know, there was no preconceived notion that it was me or not me. And about October, they ran out of candidates, and they offered me the role. And so...

I'm on my way. And it was, you know, in the middle of the largest integration in our company's history. We actually did two mergers in 2020. We call them partnerships. And then we did a $100 million sub debt offering. And we we did a lot of really great things. It was actually - I'm still in charge of capital markets as well. We made $100 million in mortgage through a lot of those activities. And so it's a tremendous ride and now it's really been the most exciting three years of my career. I mean, it's more about - community banking is so great, because these things still matter. Relationships still matter. And I get to go out and I get to meet, meet with customers, I get to be part of the Vanderbilt partnership. I get to go out and meet with all the business leaders in town and I get to travel the footprint and so it's really, really exciting and a great place to be.

Yeah, I think our relationship and evolving relationship is a microcosm of Nashville and that people are very welcoming. We like to do business with Nashville, Nashvillians. People like to do business together. And even in some of the more like competitive environments, you have 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. Yep. But look, 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 the Vanderbilt partnership came about over the last couple of years. And we've obviously looked at Vanderbilt and said, 'Hey, you know, what a pillar of the community,' I think is y'all were out. You've had a lot of banking relationships, you were looking for a community partner, we love to be associated with with the Vanderbilt name. And it's more than just - yeah it started with athletics and 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 deal?' It really became, 'Wow, we're really like minded organizations. 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 in Nashville, in the state, in the Southeast?' Y'all are universal brand, right? Vanderbilt's known all over the world. And so 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, the professors, the staff, and, you know, if some of the some of the kids today, it's like, 'Hey, how can I buy a house in five years? Where can I do an internship?' You got new people on campus, and 'I've never had a checking account.' How can we help that financial literacy? Giving back to the community is also very important to both of our institutions. So there's just a lot of community type stuff that really works well. And then -

Yeah, we really feel like local matters. And for us, that's local decision making, but being in your community. And so that when you come to see whomever at FirstBank that you need something done that they can make a decision right there for you. And then also, when you see them at the grocery store, or church or second harvest, that we're side by side work and and better in the community, it's very important.

So three years ago, we sat down in our strategic planning meeting, it's late 2020. And we have a guy on our team who's worked with yall's Wond'ry department, his name is Wade Peery, and he's our chief innovations officer - that did not exist at FirstBank three years ago, the department, the job doesn't exist in most community banks in the US. So we're a little bit... bit ahead of where other banks like us are. And the reason for that is we looked at the environment around us and say, you know, the, our bank was founded in 1906, right? Chime, in three years added 14 million customers, alright, so let's say we have, I'll call it 350,000 customers. So in 120 years, right? We got to 300,000 and then three yours, they got the 14 million, and what do they offer? A checking account? Right? Or, you know, it's not even, you'd say, well, that's not even innovative. I mean, but the ease of business, financial technology. Our children will never go into a bank branch. Likely not have to. But when they get older!

And just make it easy for the customer to do business. Yeah. So they've been in, and they enjoy it. But yeah, these things are changing, the dynamics are changing. 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, or even lending has become commoditized in a lot of ways. People can get consumer loans through all types of financial technology. Commercial's 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 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. So that's what we've been doing the last three years. Make it easy to do business still have the ability to talk to people. Yeah, people still matter. And I think you know, when you have a FinTech, 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 to operate, especially in the younger generation. But when something goes wrong, they don't want to be on hold for three hours. 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 and so that that's really still a value add for banks in general. But making it easy. So what we figured out is, 'Hey we better partner with people that are more innovative than us. That invested in this technology, or that have invested in innovation?' We're not developers, right? So let's go find really smart people like at the Wond'ry 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 honestly, we're just scratching the surface. Yeah. And it's really exciting. And traditional banking still matters too, 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 talked about communities, it can be a region, it can be a market, but it can be a type. It can be professors at Vanderbilt, it's a community, and how do we serve them? And so trying to just rethink banking, in a lot of ways.

I think we've we've probably, I would say, when companies make it hard to do business, yeah, you're probably going out of business. I mean, that's yeah. I mean, nobody wants to do business with somebody that's difficult. And you have choices in banking. I mean, there's a lot of choices. And now there's a lot more choices through financial technology.

I mean, It's interesting, all in, in banking, in general, and this is more of a commercial tilt is a lot of deposit flows, right? Over the last six months have moved out of banks. Given the Silicon Valley crisis, people were really worried about who their bank counterparty is 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 management platforms that I think are very easy for startup companies or small to midsize businesses. That are just more flexible than traditional bank, treasury management products, meaning that can move money to CDs or T bills or money market or operating accounts. Banks have not been that great at that. So we're working with a couple of firms, actually a couple Vanderbilt graduates even on partnering and how we provide better services through that. The interesting thing is, your company goes and says, 'Hey, this is a really attractive offering. I'm gonna go put money in this financial technology company.' Well, what does that FinTech need? They need a banking relationship and then they go put the money in deposits. So money is moving out of deposits 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. Tom used to be our customer. Now he's over there. Well, this is a way for us to continue to build business. And it's a win-win, really, I mean, you're getting better technology, we're partnering with these guys. And a lot of deposit flows have left the banks. And so that's, that's really top of mind. We look at a lot of partnership, financial technologies to build efficiencies, you know, AI, really, obviously a big topic. yeah. Because, because I said, 'Hey, I gotta be, I've got to understand this.' But you know, we're doing some of the more traditional robotics and type stuff, we have some in house, people that do that just to process automation. But a lot of our innovations 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? Does it help our communities? You know, if it's a lending product? And are we good at it? And can we enhance that?' Or, 'Is this something that then 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 early-stage, startup type stuff comes our way. Because once your name is out there, you get a lot of it. And so we, as a team, probably evaluate, you know, God, there's probably been 100, in the last year of just people coming to bring a lot of good ideas, you have no idea which ones are gonna hit, right. But it's exciting. It's just different than traditional banking.

Yeah, it's a 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's a risk management. So look, if you don't just pivot, we set aside some capital and said, hey, you know, let's look at what we could do here in this space. We made an investment, actually fairly sizable investment in a company called Zippy Technologies, which focuses on manufactured housing loans, which in an affordable housing crisis, you know, they provide technology, the resources, you can close your loan, and like seven days, the traditional MH space, it takes about 90. 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 a balance sheet. And so we retain the customer, we get, obviously yield there. 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 partner with 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. It's rigorous, probably more rigorous than the team that's in charge would appreciate. Appreciate it. But there's a lot of governance? Yeah, at the end of the day, we are a bank.

Yeah, you know, I touched one of them earlier, is we were talking about when, hey, will you do this? I've always been willing to take the next thing on. And, and I think it's important that you play a little bit of a long game when you think about your career, and so many of us get caught up in Well, Tom's asked me to do this. Yeah, what's he going to give me in return? Right? And not understanding opportunity. Was I qualified to be the CFO at FirstBank in April of 2020? Well, yeah, I didn't just say, 'Sure, I'll do it. Give me a raise' and all that stuff, right? It's like, no, wait. First of all, it's gonna be a lot of hard work. You're always trading something off, right? Whether it's family, time, friends. But you gotta embrace it, 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, or I can't expect you to manage my career for me. So as you sit out, or you set out and you think about, Hey, what is it I want to do? What is it I want to be? Yeah, 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 the CFO of FirstBank,' and I embrace that. I want somebody to come take my job. That means I'm doing things well. But my path is not your path. And so it's not a straight line, it's squiggly, and we can get you there. But embrace that. I mean, I think that that's okay. You don't have to go get, 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. So let's, let's figure it out, mentor.

Well, all that can happen at Vanderbilt. So, absolutely. But I think you just all of that is you got to manage your career. And then one of the other things is, and this is a mentality that we try to maintain: the closest to the broom sweeps the floor. So there's 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, I pick it up, right. You know, if you need help finding your seat at FirstBank Stadium, well, let's remember who we are. Remember, what our parents taught us. Let's be good people. And there's no, there's no reason to not ever do that. And it just really, always bothers me when people say, well, that's not my job. I mean well, I just don't get that.

Yeah, I don't get that. I think that you build your team. And everything around you, your company and your culture, by being willing to do the hard work, the easy work, the everything in between, and lead by example, and then hire really good people. That's the best way to be successful is hire people that are smarter than you that don't fit. If I hire a bunch of Michael Mettees, we're not going to be successful. Right? You need people that complement your skillset. That are better at their jobs than you are at their jobs. And then you listen to them. I tell my people, I hired you so you tell me what to do. Not for me to tell you what to do.

Thank you for having me. Appreciate it, Tom.