Indie Banker

Mike Fitzgerald on the power of everyday deposits

By Phil Britt

As chief revenue and deposit officer for State Bank and Trust Co. in Atlanta, Mike Fitzgerald holds an unusual title for a community banker. His formal title and responsibilities underscore the fundamentally essential role that ordinary deposit accounts serve in the Main Street banking model.

Fitzgerald says State Bank and Trust executives have always considered the $2.6 billion-asset community bank’s retail deposits to be “the value of the franchise.” It’s traditional household and business deposits that provide the low-cost funding for lending at community banks, he points out. More than any other bank product, deposit accounts also best solidify long-term relationships with customers, both retail and commercial alike.

“Deposits create a competitive advantage in earning a total customer relationship. They provide a more meaningful relationship than leading with loans.”

Dan Speight, State Bank and Trust’s vice chairman and chief operating officer, and Fitzgerald’s one-time boss, echoes those traditional, back-to-basics views about too-seldom heralded deposits, deposit accounts and depositors. Loans drive revenue, but deposits drive loans, says Speight, who served as the bank’s first chief deposit officer.

Speight says he established and served in the bank’s chief deposit officer position in 2010 in order to bring more focus to deposit accounts, including commercial payroll and treasury services. The bank even purchased a payroll processing company to better, more fully serve the needs of its commercial customers. “As a business bank, we want to bank the business principals and the employees of our clients,” he explains. “Loans come and go. Deposit relationships are much more sticky.”

Power of deposits

Fitzgerald, who had been a consultant for State Bank and Trust on its deposit strategies, was appointed to the position in 2012. “We’re creating a competitive advantage by earning a total relationship with the customer with our deposit products,” he says.

By always strategically pursuing deposits, even as most banks today are flush with deposits, State Bank and Trust Co. is equipped to offer better rates on loans due to the lower cost of funds its deposits structurally provide, Fitzgerald says. However, the community bank does not seek to compete aggressively to “buy” deposits by offering above-market rates, either for existing deposit accounts or through purchased brokered deposits. Instead, product specialists work hard to develop accounts that feature customer choice, convenience and service via computers, telephones and mobile devices.

As chief deposit officer, Fitzgerald has “a seat at the table,” ensuring that deposits get equal treatment as the bank plans its strategic direction. He also provides strategic direction for the bank’s payment solutions, treasury services and deposit product development, as well as for customer care on the deposit side of the bank.

After observing the bank’s whole operation for a lengthy period, Fitzgerald wrote a 200-page internal report, “Roadmap to the Future,” detailing his ideas for implementing ways to grow State Bank and Trust’s revenues through deposits. More than 60 concepts in the report have been implemented. “It’s not about effecting change; it’s about what changes to effect.”

Fitzgerald works with specialists in risk, marketing and sales to design products that meet the needs of various target customers. For example, a dentist might need a high-speed remote deposit capture scanner to deposit checks and an account that minimizes the cost of processing a high number of checks, whereas the owner of a quick service restaurant likely doesn’t need the scanner, but might need an account that offers lower payment card processing fees.

Getting personal

Regardless of the type of commercial deposit product, all are developed to maximize ease of use for the customer, whether he or she wants to use a personal computer, mobile phone or tablet, Fitzgerald adds. In that way, State Bank and Trust Co. prides itself on providing multiple points of highly available service, operating 21 retail locations and providing service through phone and Internet channels. The bank’s executives also make themselves as readily accessible for customers as frontline staff.

“It’s all about choice and convenience,” Fitzgerald says.

Fitzgerald works with the bank’s retail and commercial sales teams to help them focus on the right prospects. Those new clients are the ones who favor choice and convenience as well as high touch and superior service, he says. “We continue to refine our advertising efforts to make sure that we are spending our resources on those target business segments that represent our best opportunity for new clients.”

Before any new product is introduced, Fitzgerald works with the bank’s risk specialists to ensure that potential fraud and other risk issues are addressed. For example, before a mobile remote deposit capture app was launched, protections were put in place to ensure that a customer couldn’t deposit a check electronically and still be able to deposit that same check at a branch location.

Fitzgerald says it’s also important for him to continue to look for opportunities to meet evolving customer demands for deposit products, which could be very different 24 months from now than they are today. “I have to see how their demands are evolving.”

Thankfully, however, traditional deposit accounts remain as much in demand as they were when community banks first began offering them. Fitzgerald says halleluiah to that.


Phil Britt is a financial writer in Chicago.