What It Means To Be a Modern Bank

Joe Welu: Hello everyone. I'm Joe Welu. Thanks so much for tuning in to Expert Insights, where we talk with industry leaders across modern financial services, to discuss leadership and innovation. Let's get started. Hello everyone, Joe Welu here, with another episode of Expert Insights. Today, I am joined by President of the Mortgage Division at Evolve Bank and Trust, Mr. Lance Lemoine. Welcome to Expert Insights. Thanks for joining the podcast, Lance.

Lance Lemoine: Thank you, Joe. Appreciate you having me.

Joe Welu: Mr. Lemoine has more than 30 years experience and expertise in mortgage banking, capital markets, marketing, consumer lending. You were with Fleet National Bank, Fleet Mortgage, for 15 years. You also had a pretty lengthy career at Wells Fargo and USAA, so you've been at some really well known, big organizations. And you were also the CEO of AmeriPro Home Loans prior to it being purchased by Guild. So I'm assuming I have all that right, Lance, and would love to get any additional context about kind of your path to success that's led you to where you're at.

Lance Lemoine: Well, thanks, Joe. Yeah, it's been a little bit more than 30 years, pushing 38 years. I know I don't look that old, but yeah.

Joe Welu: You don't, you don't at all.

Lance Lemoine: That's your makeup crew that helped me out there.

Joe Welu: Oh, yeah.

Lance Lemoine: Yeah. I feel like I've had a great, great career in the sense that, you know, worked for some big banks, worked for big mortgage companies. I spent some time with Countrywide. I spent some time at some other smaller banks as well. Some mortgage banking, independent mortgage bankers, banks, and it's been a fun ride. Interesting business we're in.

Joe Welu: So Lance, give us a little bit of an overview of Evolve Bank and Trust, the organization, a little bit of the story. Any context you can provide about the bank.

Lance Lemoine: Yeah. Happy to do that. So, I would say we're a mid- size bank, small bank, over a billion dollars in assets. Been around for a long time, pushing 90 years old. As a modern bank, I would say over the last 20 years, we've really become a consortium of national businesses. So we've got a very large open banking platform that's very substantial in the marketplace. We've got Physicians Capital Group, Litigation Trust. We've got a nationwide small business lending arm. We've got just a few branches in Arkansas and Tennessee. So we're not really your... What you would think of as your typical bank. We're a inaudible of national businesses. And that makes us very entrepreneurial as a group, as a leadership group.

Joe Welu: So you guys are thinking about how to serve all of those different businesses with the technology offerings that you guys are working on, is thought about in relation to all of those different businesses, the way it sounds.

Lance Lemoine: Yeah, for sure. Absolutely.

Joe Welu: I want to get into a little bit about your story, and some of your secrets to success. I've consistently heard about your leadership, the quality of how you run the business, how you build culture. So I want to talk about a few of those things, but I think just to kind of set the tone a little bit, as you look at where we are in this cycle... We talked a little bit before we went on the air that, look the markets are in a little bit of flux here, and however, the long- term impact, or the long- term benefit of owning a home in America is still going to be really important. Right? I know we agree on that. How are you guys thinking about serving the customer today, in terms of the market cycle we're in, with rates all over the place? Does it change your approach at all? Just give me a little bit of context on that, before we get into some of the deeper items.

Lance Lemoine: Yeah. Good question. And I think the word that you use there that is so central to how we operate, is service. You talked about leadership as well, and I think I have really benefited by being able to surround myself with good leadership. So at Evolve, I would tell you that we are hyper- focused on service levels. And when you say service levels in our business, typically that means you make your closings on time, which we do, 99 to 99.5% of the time. This past month, 100% of contracts were closed on time. But I think more importantly, it's about individuals serving one another and having that strong team spirit, team approach. It's a difficult market out there. We've got some really great sales people on our team, great referral partners, and everyone is relying on us to close on time, serve one another on time. So every division, every department, a lot of it has to do with communications, Matt Knueven, who runs our Operations, sends out a daily email. Details everything that's going on throughout our entire pipeline. So we're completely transparent, and confident in what we do, and focused in on it.

Joe Welu: So I want to talk about, initially, you guys have, from what I hear, and correct me if I'm wrong, but you guys have one of the highest retention rates of your sales team of any of the lenders or banks that I frequently talk to. That's been an area of struggle for a lot of organizations, and you guys typically come in as somebody that does a great job at that. Can you share with the audience, your thoughts on that? How have you managed to leverage the... Create a culture that people want to continue to be a part of in this environment? And have you noticed any challenges with retaining people as the market has changed?

Lance Lemoine: You know, there's always challenges retaining people, but if you can provide great products, great service, great support, great communications, friendships, partnerships along the way. I think that's really what we all need to focus in on. So we have a lot of reward and recognition programs, and President's Clubs, and various daily, monthly announcements, to try to create that sense of belonging and support. But I think it just comes down to being resolute in that hyper- focus on service levels. If our team...

Joe Welu: And when you say service level to your people, as well as to the customer, is that accurate?

Lance Lemoine: Exactly. Exactly.

Joe Welu: Okay. I think this is really an important distinction, and we spend a lot of time working and talking with partners, organizations. Both customers and tech partners that we have in talking about, everybody's talking so deeply all the time about serving the customer, right? And creating experience and outcomes for that customer. But something that I'm just catching from you, that I want to maybe see if is fair or not, and I'll make my own assumption here. The way you guys intensely focus on serving your people, I'm guessing, directly plays into the reason you've been able to retain. You treat your people as, that's part of the role of leadership, is to serve those people. Is that accurate?

Lance Lemoine: Yeah. And I'm glad you made that delineation, because I was just kind of espouting the whole service thing. But no, you're absolutely right. So whether it's our capital markets, or secondary team lock desk, underwriting, closing, disclosure, I mean, you name it, anything that goes into the daily workings for our teams that are out there working with our referral partners. We're hyper- focused on ensuring that they get what it is they need. I think some of what drives that for us, Joe, is I was a top originator as a young man, a long time ago, same with our head of Op, same with our national production leader, and many of our other leaders. So we kind of understand what's going on in the transaction, and being so purchase focused, 95% of our business is purchase. That's Realtors, buy side, sell side. It's families. It's families that are moving in, moving out. All that anxiety that goes with that. So, having that service level approach, 360, I think really, really helps.

Joe Welu: So you're always looking through the lens of somebody that is an insider. Somebody that has walked in the shoes of the person that's originating. And that makes total sense. In terms of, I see a lot of leaders that talk about serving their people, and having good intent. Okay, I think they have good intent, a lot of people. But when it comes down to doing that over time, and the execution of that, I see a lot of organizations struggle with it. Do you have any best practices that you guys have in place to kind of measure how you're doing, assuming your goal is continuously to have deep level of service to your people and your customers? How are you measuring those things, or are you just staying involved so deeply you just know?

Lance Lemoine: Well, we do a lot of things. We survey our employees, we survey our borrowers, we try to survey our Realtor partners. So there's a lot of internal, external surveying that goes on. We track and report, as I said, daily, on how we're doing various measures. And whether it's underwriting turn times, days to close, things of that nature.

Joe Welu: So you're very data driven in, when you're thinking about service, you're data- driven in the analysis of that, and the tracking, and the benchmarking. And that's, from what I'm hearing, that's really how you keep focused on progress, and where you're at, is using data. Right? Makes sense.

Lance Lemoine: Absolutely.

Joe Welu: Yeah.

Lance Lemoine: Absolutely. I think something else that's important to mention here, that we are kind of fortunate to have, is a bank ownership, and a board, that are very familiar with mortgage lending. And we've been in the mortgage business for over 20 years. So they're very committed, and very interested in our business. Whereas at some other companies, that can sway, depending on which way the markets are swaying.

Joe Welu: Yeah, no question. We talk a lot about what it means to be a modern bank, what it means to be a modern lender, and how things evolve. It sounds like you guys, based on the additional businesses you guys are involved with, you're already pretty far down the evolution of kind of changing the status quo from being a traditional brick and mortar bank, to something different, and something bigger. How would you think... How would you articulate the vision for the bank over the next 3, 5, 10 years?

Lance Lemoine: Well, I think our bank prides itself on being very closely aligned with many, many FinTech industries. So our open banking platform, I think we've got 950 or 1,000 FinTech partners that we provide payment solutions to, and other products to. Mortgage lending, I think we want to get better, faster, cleaner, more perfect. Mortgage banking requires a perfect execution on the mortgage, on the front end, if you want to sell it on the back end. And a lot... That's going to require some investments in technology, which we've been doing for several years now. And we have several projects underway right now, with improving our front end mobile app, with improving our CRM, and sales solutions, and customer information, so that we can help manage that journey. Or maybe react to the needs of that customer journey. Not necessarily manage their journey for them. And improving our front- end loan origination system. We're undergoing all of those things right now, with the hope that they will all kick off here in the next 30 to 45 days.

Joe Welu: That makes sense. So you guys are leaning in, and really investing in the organization, investing in tech broadly, and continuing to make progress, it sounds like, in a variety of different places. All of which, sounds like, impact not just your end customer in better outcomes. But also the things that I'm hearing from you guys, and what I know about you, is you're also investing in technology, realizing the way your people work, and serve the end customers, is changing also. Is that fair to say?

Lance Lemoine: Oh, that's very fair to say.

Joe Welu: Yeah.

Lance Lemoine: I would say they kind of go hand in hand.

Joe Welu: Yeah.

Lance Lemoine: And I don't want to say it's the hope that one then helps deliver a better service to the end customer. I think we all know that it will. And it's just a matter of, again, investing in making sure that those projects go online on appropriate time.

Joe Welu: Yeah. So I have a, maybe a somewhat tough question for you, and you don't certainly have to answer if you don't want to. But you know, the banks, and some of your, maybe competitors, maybe not competitors, but let's just say an average bank that is maybe more focused on being kind of traditional, that's not as comfortable making changes. That's not as comfortable kind of pushing the needle to modernize, to invest in tech. What advice would you give, or thoughts would you give, to those types of organizations? That are maybe saying," You know, we're not going to continue to modernize, and not going to continue to make these big investments. We're going to stick to what we know." What would you say to those organizations?

Lance Lemoine: You know, a good question. Good, tough question. It's hard to say anything to the organizations themselves. What I would say to the leaders in particular divisions, or business units, or whatever, is to have the courage, or to be resolute, to break down the bureaucracy.

Joe Welu: Yeah.

Lance Lemoine: If you're going to stay alive, if you're going to stay relevant, if you're going to be competitive, you have to demand. And I think that's where the challenge is, Joe. I don't have that bureaucracy. I've got a tremendous board, and executive leadership team at the bank. And we make sound, rational business decisions. I think that's why some of our locations and branches have been with us 10, 12, 14 years. That really benefits us. And that's where I think some of the larger banks in particular, or any bank that's fraught with a little bit of bureaucracy, and I think if you get more than 12 people, you could end up with a bureaucracy. Never mind thousands. Because it's more...

Joe Welu: Totally. Yeah, no, that's really well said. I see that in organizations both large and small, that can be overly bureaucratic. And what happens from our perspective, and it sounds like this is one of the reasons you're successful is, you guys don't have this analysis paralysis. You make data- driven decisions. You're able to make them efficiently and quickly, and you're able to make progress. Even if it's not perfect, you're able to make progress pretty rapidly. And if you think about that, as in comparison to a lot of organization, it really doesn't... I don't think size necessarily is the deciding factor. But if you compare that to a lot of organizations that are maybe stuck in the mud a little bit, and feel like they're a slow moving ship, versus something that's more nimble. It tends to be, they just get overly bogged down in decision making process and people that are willing. You said, a word I love, have the courage, to be committed, to having a growth mindset, and moving the needle forward, positioning the organization for the future. Lance you've had a very successful career. You've been in the industry a long time. You've seen a lot of cycles. As you look at this cycle, we're certainly in a, as broadly speaking, lending is in a contraction cycle, in terms of less transaction volumes. As you look at rates where they're at, home prices where they're at, over the next year to two years, what does your crystal ball see? What do you see happening with the markets? Transaction volumes, home ownership?

Lance Lemoine: Yeah. We're in an interesting environment, right? One thing that I don't have, is any fear with what's coming, because there are lots of good signs. We've got a burgeoning economy. I think the underwriting of credit has been very, very sound. You know, this certain cycle that we see with rising values of homes, and such demand, I don't see that we necessarily have a bubble.

Joe Welu: Yeah.

Lance Lemoine: That's my opinion. What I do see is, going back to blocking and tackling. I see our teams having events, and meeting with referral partners they hadn't met with in the last couple of years for no particular reason.

Joe Welu: Yeah. Right.

Lance Lemoine: And hopefully that's behind us, and that can continue. We ourselves came out with some portfolio products, some 5, 7, 10 year ARMs, to respond to interest rates starting to approach 6%. We've tempered back to 4 3/4, 5, 5 1/ 8. We're seeing some continuity there. Rates have been there for 30 to 40 days, 45 days. So the market's starting to accept that. And we're seeing more margin coming back in that product. And we're seeing a lot of homes go on the market, and we're seeing good activity on the purchase side.

Joe Welu: So bottom line, you're incredibly bullish, long- term. Right? And incredibly bullish that home ownership's going to continue to be important. And markets are going to balance themselves out. Is that... I read that correctly?

Lance Lemoine: Absolutely. And it's just about maintaining your particular share, in your particular market.

Joe Welu: Yeah. Well, Lance, thank you so much for joining us today. Really appreciate you taking the time to share some of your expertise and insights, and the great work you guys are doing at Evolve Bank and Trust. We're huge fans of the organization, the brand, and the work you guys are doing. So thanks everyone for joining us today. We'll see you next time for another episode of Expert Insights.

Lance Lemoine: Thank you, Joe. Appreciate it.

Joe Welu: Thanks so much for joining us today. Be sure to subscribe wherever you get your podcast.