Feature posing important questions to consider regarding your banking strategy.
Feature posing important questions to consider regarding your banking strategy.
Questions you should ask yourself before deciding what kind of banking strategy your company needs
Mention bankers to Stephen Davies and he's likely to tell you his rhinoceros joke: "Why is a banker like a rhinoceros? Because he's thick-skinned and charges a lot." Or he may ask you what the collective noun is for lending officers ("panic"). Davies, president of U.S. Computing Maintenance, in Farmingdale, N.Y., a $15-million on-site computer-maintenance business and four-time Inc. 500 company, finds bank humor especially savory because he spent 10 years lending to small businesses before becoming an entrepreneur. "Bankers take themselves too seriously," notes Davies. "I thought I was a businessman. Since I left I realize I didn't understand what was going on. I didn't know what I didn't know."
The responses of entrepreneurs to a recent survey about banking echo Davies's sentiments, often in much stronger terms. Bankers "are a hateful, stupid, useless breed," says Jeff Winant, president of Leveraged Technology, in New York City. "They couldn't care less about my success," says Ned Dempsey of Century West Engineering Corp., in Portland, Oreg. "Some of them are nothing but clerks, really," notes Mark Paper of Lewis Bolt & Nut Co., in Wayzata, Minn. "They're people with no comprehension of our business, whose primary concern is protecting their butts," states Karen Kennedy, president of KSK Communications Ltd., in Vienna, Va.
OK. Enough slings and arrows. It's clear that entrepreneurs have horror stories about banks that rival the perfidy of the legal profession's most egregious ambulance chasers or medicine's most skilled malpractice artists. But does anyone tell those war stories with pride? Unlike false starts, insane hours, and fabulously off-the-mark projections, banking blow-its don't have to be a part of every entrepreneur's rite of passage. "Company owners don't think twice about hiring a CPA or an attorney when they need one, but do they think about asking a banker for financial-service assistance?" Denise Qualls, a relationship manager (that's 1990s bankspeak for loan officer) for a Citibank branch in Los Altos, Calif., asks that question rhetorically but then adds that she's beginning to see an increase in entrepreneurs' willingness to ask banks for help. "Slowly, their comfort level is rising," she says.
Banks, and bankers, don't have to be the enemy. In fact, there's every indication that banks are looking to small businesses (that is, companies with revenues less than $5 million) and middle-market ($5 million to $200 million) sectors now more than ever. "Small is where the growth is," says David Aloise, who heads up the New England division of Bank of Boston's recently formed Small Business Banking Unit. Banks are turning increasingly to small entrepreneurial companies not only because those companies are the primary job generators fueling today's economy but also because of what to banks is a terrifying development: large companies are (gasp!) taking their business elsewhere.
Easier access to equity-capital and institutional-debt markets has caused a decline in loan demand from big companies. And the businesses that do stick around are tough customers, insisting on rates and terms many banks are hard-pressed to deliver. (One global giant referred to a $30-billion institution as "a nice little bank.") This is great news for small businesses. As Eric Rosengren, a vice-president and economist at the Federal Reserve Bank of Boston, told an audience of bankers at a convention last May, "The shrinking profit margins on lines of business to large customers have encouraged banks to focus more attention on small-business borrowers."
How much attention? Even the Feds are getting into the act, exhibiting surprisingly keen interest in the small-business-lending sector. The FDIC Improvement Act of 1991 mandates that financial institutions include their small-business-lending data in their annual call reports. (The act requires banks to report small-business loans of less than $1 million; previously, they reported total loan volume with no breakdowns by size.) The idea is to provide consumers (and fellow bankers) with a more accurate picture of a particular institution's small-business-lending activity. The Small Business Administration is in the middle of a study that analyzes small-business call-report data by state and ranks banks in terms of their service to the small-business market. As the study's director and the SBA's chief economic adviser, Robert E. Berney, states in the conclusion to a draft of the study, "The goal of the study is to make more credit available to small-business borrowers by increasing the knowledge of consumers' banking services. Knowing that some successful banks are active small-business lenders will hopefully encourage other banks to compete for the small-firm customer."
So with the banks fighting over you, what should you keep in mind when you're setting up a banking relationship, or rethinking your current one? We spoke to a variety of Inc.'s constituents, as well as to respondents to a banking survey conducted for Inc. by the Executive Committee (TEC), to determine what's happening in small-business banking from an entrepreneur's point of view. Companies we spoke to ranged in size from $50,000 to more than $50 million in revenues. Based on those conversations, we developed a checklist: six key questions you should ask yourself about your banking relationship.* * *
1. Do You Really Need a Bank?
The answer to this question, predictably, depends on whom you ask. "Theoretically, small business does not need a bank today. Period." Charles Wendel, a banking consultant and author, makes that point in his new book, The Middle Market: An Integrated Approach to Increasing Share and Profitability in Banking's Most Dynamic Market (Probus Publishing, 1994). He cites AT&T credit cards, mutual funds, brokerage houses, leasing companies, and commercial finance and asset-based-lending firms as just a few of the many alternative financing options available for small companies in today's marketplace. "The point is that there are a lot of nonbank providers of both transaction processing and investment or borrowing services for small businesses," says Wendel. The competition is such that banks risk losing market share as companies migrate to those alternative providers, he adds.
Our TEC survey findings bear Wendel out. Although the majority of the 235 surveyed company owners still rely on commercial and savings banks for most of their financial needs, that group of bank customers shrank several percentage points from 1989 to 1994. In contrast, those who use investment banks more than doubled their ranks over the five-year period. Use of credit unions, life-insurance companies, stockbrokers, and leasing companies remained about the same.
Wayne Miller, whose MicroVoice Applications Inc. was the 1994 Emerging Entrepreneur of the Year winner and also #5 on the most recent Inc. 500 list, is one entrepreneur who is distancing himself from traditional banks. When asked to characterize his relationship with his bank, the former accountant replies, "I have virtually no relationship. I deal with my broker [Merrill Lynch]." MicroVoice, which develops software for the rapidly growing interactive- voice-response industry, is in the enviable position of being cash rich -- to the tune of about $5 million. According to Miller, one of the reasons he "had a hard time with" his original bank was its inability to pay him interest on those reserves without making monitoring his accounts a full-time job for someone in-house. At Merrill Lynch, Miller has a corporate checking account that automatically sweeps excess funds into an interest-bearing mutual fund on a daily basis, "even while I sleep," he says.
Spurred by Merrill Lynch and other brokerage houses, many banks (particularly the large ones) are beginning to offer versions of automatic-sweep accounts like Miller's, but they are still the exception rather than the rule. Merrill Lynch finance manager Tim Klitch, who spent 10 years as a loan officer, says that banks have a financial incentive not to offer sweeps. Thanks to a federal regulation known as "Regulation Q," a corporation cannot own an interest-bearing checking account. As a result, says Klitch, one of banks' biggest profit centers is idle deposits sitting in checking accounts. "A bank doesn't usually approach a client and offer to sweep. You've got to go and get it," he says. "It's pretty much like pulling teeth."
Miller is pleased with Merrill Lynch's sophisticated cash-management services, as well as its facility in handling interstate banking requests. (The brokerage house has offices in all 50 states.) But he says the brokerage firm still lags behind banks in some critical areas. Payroll is one: by law, only banks can act as fiduciaries in turning over payroll taxes to the government; Miller maintains a separate account with a commercial bank expressly for that purpose. Also, Miller says, he's "definitely small potatoes" at Merrill Lynch; at a bank, he'd expect close, personal attention. The brokerage house's layers of bureaucracy mean that any unusual requests -- setting up an escrow account on a temporary basis or getting a letter of credit for international transactions -- can take months. "The chain of command is so huge you can't talk to anybody who can make a decision," says Miller.
Of course, there's another obvious reason that brokerage houses aren't for everyone. Most set minimum deposit and loan requirements well beyond what small businesses are able and willing to meet. (Merrill Lynch, one of the large players and the one that's been servicing the small-business community the longest -- 10 years -- still has a minimum commercial-deposit requirement of $20,000 to open an account, and a minimum loan size of $300,000.)
What if you're too small to show up on the radar screen of a brokerage house, let alone that of your local bank? That was the predicament facing Wee Tai Hom last fall, when he was in search of a $2,000 to $3,000 loan to expand his year-old aquaculture market and art gallery, AquaSource, in the Soho section of New York City. He was roundly turned down by four banks. "The problem with banks is you have to be an established company and in an established industry," says Hom. He was neither. "In addition, the banks all wanted five years of tax returns -- impossible for a start-up!" he says.
Hom approached the New York affiliate of Accion International, a microenterprise lender that started out making loans to low-income entrepreneurs in Latin America and that has recently opened up five branches in the United States. Accion acts as an intermediary between the traditional banking sector and low-income entrepreneurs, borrowing money from banks and then turning around and lending it to individuals like Hom, people who need credit but do not have the requisite credentials for a bank.
Hom obtained a $1,000 loan from Accion within three weeks. "They looked at my business but really focused on the credibility of the person," he says. In addition to allowing Hom to expand his product line, finance inventory, and conduct some local public relations, the Accion loan enabled him to establish a credit history with a financial institution "far sooner than I'd otherwise have been able," says Hom. "It expedited that process by two to three years." Each time Hom repays an Accion loan on time, he's eligible to apply for a larger one, says loan officer Richard Santiago. Hom plans to bank with Accion International until he qualifies for commercial-bank financing.
Hom's is not an isolated case. Microenterprise lending is entering mainstream banking. The Community Reinvestment Act of 1977 states that regulated financial institutions "have a continuing and affirmative obligation to help meet the credit needs of the local communities in which they are chartered," and microenterprise lenders like Accion International are a way to bring banks to the table on this. Despite huge demand, it's not profitable for most banks to make the tiny loans -- $500 to $5,000 -- that microenterprises need. "Anything under $50,000 is not worth their while," says Accion director of communications Gabriela Romanow. Lending funds to a microenterprise lender decreases the banks' risk, allowing them to serve the small-business market because it makes good business sense. "It's not giving away any money -- it's an efficient, effective model that's strategically helpful to banks," says Joel Werkema, community-affairs specialist at the Federal Reserve Bank of Boston. At last count, there were 250 microenterprise lenders in 45 states; over the past five years, those firms have lent more than $44 million to small businesses.* * *
2. Do You Need More Than One Bank?
Banking with one bank is still the norm for TEC survey respondents, but the survey findings and conversations with company owners suggest that the use of multiple banks is on the rise. "I've never believed in the philosophy of putting all my eggs in one basket or bank," states Taylor Fernley, who manages more than 100 accounts with 10 commercial banks, eight savings banks, and five mutual funds in the course of running his trade-association-management company, Fernley & Fernley Inc., in Philadelphia.
Although the nature of Fernley's business -- it manages 24 national trade associations and doesn't "commingle funds" says Fernley -- virtually necessitates a multiple-bank habit, many entrepreneurs operating in a single location practice multiple banking as a precaution. Fred Armstrong, who runs Armstrong/Robitaille, an $80-million business-insurance brokerage firm in Tustin, Calif., says, "We've always taken a prudent approach because the money we have in deposits is not ours." The firm has relationships with three or four banks as well as a couple of brokerage houses. April Morris, president of Associated Engineers, a $5-million civil-engineering company in California's Inland Empire, has never kept more than $100,000 in any one bank because anything more than that amount isn't insured. She currently uses seven savings banks and keeps $400,000 in one account to flow payroll through: "We just flush money in and out of that account." It's not a hassle, she says, because couriers visit her company three times a week to pick up accounts receivable.
Consultant Glenn Ebersole thinks it's "absolutely critical" to use more than one bank, more for competitive than for security-related reasons. He currently uses three banks to handle the financial needs of his $200,000 consulting firm, J.G. Ebersole Associates, in Lancaster, Pa. "It keeps things competitive when they know they're not the only one I'm talking to," says Ebersole. A little over a year ago the number two person at one of his banks approached him and said, "I will never lose a deal because of an interest rate." The bank made good on its claim: several months later it brought to Ebersole's attention a special line of credit with a 3.99% interest rate that "is still in effect," says a clearly pleased Ebersole.* * *
3. What Has Your Banker Done for You Lately?
If your banker doesn't network for you, show you how to save costs, and treat you with the respect any customer deserves, you should consider finding another bank. Your chances of finding one that does all of the above -- unheard of even a few years ago -- are now better than ever. "Banks are slowly beginning to realize that they're just another vendor and that they wouldn't get away with their behavior if they were in any other profession," notes banker-turned-entrepreneur Stephen Davies.
Janis LeBude, who runs Protocall, a $20-million firm in Voorhees, N.J., that finds staff to handle home-nursing, therapy, and business needs, illustrates Davies's point. LeBude's bank regularly uses her company's staffing services to meet its temporary-personnel needs. "When we select a bank, one of the criteria we look at is if we can give each other business. I try to do that with all my vendors," says LeBude. Karen Selley, CEO of CMT, a $3-million provider of physical-, occupational-, and speech-therapy services and #225 on the Inc. 500 in 1994, recently switched from her bank of 15 years because it lacked what she calls "a mutual-customer-service philosophy -- treating each other as each other's customer, rather than having our bankers believe we're begging them. Small businesses don't have to put up with the hassle. We're their customer," she stresses.
The fact that most loan officers now call themselves relationship managers is a hopeful sign that Selley's message may be sinking in. Citibank's Denise Qualls spent a recent morning learning more than she ever wanted to know about social-security regulations, making phone calls and writing letters on behalf of a company owner from India who needed a social-security number to get a tax-ID number and open a bank account for his business's new Bay Area branch office. She says she routinely performs services that do not generate income for the bank or help her meet her sales goals, often for organizations that are not current customers. "They might not be my customers today, but they may be a year from now," she says. "That's happened."
Banks are going to ever-greater lengths to keep small-business customers happy. Consider the case of Randy Rolston, CEO of Victorian Papers, a $5-million mail-order catalog and two-time Inc. 500 company in Kansas City, Mo. When Rolston complained to his banker that he was being eaten alive by the 12¢ to 20¢ handling charges on each of the 300 to 400 checks his business was processing daily, his bank suggested a money-market account that enables him to write and process checks for free. Rolston's savings? From $60 to $70 a day.
Remarkable as it sounds, some banks don't wait for customers to complain or ask for things; instead, they anticipate their clients' needs. Carole Petranovich, CEO of Computer Corner, a $5-million computer retailer and service provider in Albuquerque and #196 on the Inc. 500 list in 1994, loves the fact that her bank does "collection services for me over and above the call of duty." Not only does it alert her to bounced checks from her customers, it calls the bank on those checks, finds out if money is available, and then advises her what to do. "That kind of extra customer service is what it takes today," says Petranovich.
Laurie Snyder is pleased that her new bank, which is owned by a Japanese conglomerate, is putting her in contact with trading companies in Japan, where she is now doing some export business for her Inc. 500 children's clothing company, Flap Happy, in Santa Monica, Calif. Snyder shopped around at 10 banks and settled on her current one because "they're always asking me what more they can do for me."
Entrepreneurs cite many other ways in which banks are meeting their needs today. For example, some bankers offer lessons in on-line banking or reading financial statements. Others invite clients and prospective clients to educational seminars and community events. Still others serve as an informal board of directors for their small-business clients. "In the past it was never an open relationship. Banks were in the driver's seat," says Steve Simon, a commercial-banking vice-president at Firstar Bank in Des Moines. "That's all changed now."* * *
4. How Do You Know When It's Time to Leave?
If your banker isn't providing you with a good number of the services mentioned in the previous section, it's probably time for you to leave or at least to shop around. Like most company owners, Daniel Meloro was reluctant to make a move from his bank of 35 years, but after hearing from colleagues about sophisticated cash-management features, he recently decided to rethink the relationship his $35-million food-ingredient-manufacturing business had with its banker. "People think of their banker like their family doctor; they never dream to question him or her unless there's a huge problem," says Meloro. He describes the search process as "a pain, and something I wouldn't relish doing again." Yet, in the long run, he feels that his company, Farbest-Tallman Foods Corp., in Montvale, N.J., will be better off for it. Thanks to his investigating, Meloro now knows to ask for options like automatic sweeps, on-line banking, interest-rate caps, and interest rates pegged to a less volatile international London-based rate (versus the Fed's rate). Meloro learns more from each banker he visits, playing banks' offerings off one another, and says, "It's an open field out there."
Service is one reason to switch banks. Another is that the premiums of staying with a bank, of building a long-term relationship, are vanishing in today's volatile marketplace. A bank might want your business one day and then change its mind the next. That happened to Donald Boyken twice. "Two years ago the bank we'd been with for 13 years said we were too small. We switched again in September for the same reason," says the CEO of Boyken & Associates, a construction consulting firm in Atlanta.
The TEC survey responses suggest that entrepreneurs are beginning to realize that being a long-term customer doesn't count for much with banks today: nearly half of the respondents have switched banks in the past five years, 11% in the past year alone. Jim Houghtaling, CEO of the Holt Group, an advertising firm in Greensboro, N.C., switched banks in the past year because "after 25 years as a loyal customer, I had to jump through too many hoops to get a line of credit. Quite frankly, it was embarrassing, and I resented the treatment." Jon Cunningham, CEO of C.A. Cunningham Co., a manufacturers' rep and distribution company in Charlestown, Mass., was flabbergasted when his bank asked him for a personal guarantee after the company had banked there for 25 years and had never been late on a payment. David Daly dropped his Seattle funeral home's bank of 75 years because it changed loan officers on him every 12 to 18 months. "We're an unusual business," says Daly, "and we're tired of having to continually indoctrinate new staff on the major line items of our balance sheet."
Given the volatility and fickleness of today's banking climate, it's best to decide that you don't want to do business with your bank before your bank decides that it doesn't want to do business with you. Check out the benefits your bank's competitors are offering, beware of bank mergers (a giant headache for many company owners), and by all means stay on top of your bank's fiscal health. Chastened by a rampant savings-and-loan crisis in his state, Dallas regional Entrepreneur of the Year winner Gary Salomon of American Fastsigns has made a habit of monitoring the financial performance of his banks. It has paid off for him: the CEO got out of his former bank four months before it went belly-up. Business-insurance broker Fred Armstrong wasn't so lucky: last year he opened up his morning paper to find that one of his own banks was under a cease-and-desist order even though it continues to show an operating profit. Now he tracks the performance of his banks with two bank-rating services and switches whenever his banks fail to get high marks.* * *
5. Does Your Banker Know Your Business?
To judge by the TEC survey, the answer to this question for too many company owners is a resounding no. "Didn't understand my business" is among the top reasons cited by TEC respondents who have switched banks in the past five years. Ironically, the fault may lie with company owners themselves. "Requests monthly reports on your business" ranked dead last in the respondents' list of important characteristics in a banking relationship. For those of you who think monthly reports are overkill, consider the fact that one of the banks Daniel Meloro is in discussions with asks not only for monthly financials but also for monthly reports on the company's accounts receivable, accounts payable, and inventory balances -- "all the while saying we're the most desirable customer it could have, with a spectacular balance sheet, healthy profits, and long history," says a still-stunned Meloro. "It knows more about my business than I do, and I know a lot," he adds.
Regardless of how tedious it might be, educating your banker about your business is critical to a successful relationship. Ideally, you and your banker should share responsibility for that education, but the onus is still on you to keep the bank's pipeline full of information about your company. And don't airbrush the warts. Mac Busby, CEO of Sun Protective, in San Diego, says the key to his relationship with his banker is alerting the banker to any "adverse situations" that arise in Busby's $13-million window-film-distribution company. A little over a year ago, when a bad run of product from a manufacturer caused a negative financial blip in his sales and some extra warranty cleanup costs, Busby notified his banker, and the banker was understanding. "I think many people are petrified of their bankers, but bankers are quite capable of handling bad news -- especially if there's a plan to get out of it and if you've been credible with them all along," he says. Busby's banker has raised Sun Protective's line of credit by $900,000 in the past three months, even though the company showed a loss for 1994. Busby credits that to the fact that "I've leveled with him all along."
Jane Sturgeon, finance vice-president of regional Entrepreneur of the Year winner Barr-Nunn Transportation, in Granger, Iowa, echoes Busby. The key to her successful banking relationship, she says, is a "no-surprises approach." When she was assigned a new loan officer three years ago, she sat down and wrote a lengthy letter introducing him to her business. Today the banker understands that the $29-million trucking company "goes through periods when we have excessive demands on cash" -- when it spends $400,000 in one month to license 260 trucks, for example. Thanks to the strength of the relationship, says Sturgeon, the bank improved Barr-Nunn's terms significantly, reducing its interest rate by two points, more than tripling its credit line, increasing the advance rate from 80% to 85% of its total accounts receivable, and allowing the company to hedge fuel costs by purchasing contracts that lock in a price. Her bank previously had a covenant preventing Barr-Nunn from hedging fuel costs; now it understands the value of being able to fix the company's second-highest cost.
Bob Kochman, who runs Houston Mack/Isuzu, in Houston, wishes his banker had exhibited a similar understanding of the business of selling trucks. Like all car and truck dealers, Kochman has to take possession of trucks before he sells them. In a good month he sells 100 trucks, but until he collects the money, those sales show up as a $7-million liability on his books. When his banker took a look at those books, he computed Kochman's debt-to-net-worth ratio and called him in a panic, telling him he was going broke. "I told him next month would be lousy and my debt-to-net-worth ratio would be back down, and he said, 'Good," says Kochman, chuckling. Unhappy with that communication gap, Kochman turned to a professional truck-financing company, Associates Commercial Corp., an original-equipment-manufacturer financing arm of Ford Motor Co. Associates Commercial is thrilled with Kochman's books and also gives him a portion of the interest on every truck his customers finance through Associates Commercial -- adding an extra $10,000 to $15,000 a month to Kochman's bottom line. In five years Houston Mack/Isuzu Truck's revenues have climbed from $15 million to $42 million. Says Kochman, "My old banker obviously wasn't interested in learning about my business; he was stuck in the old, traditional ratios."
6. Does Your Banker Know You?
This is not a facetious question. In 15 years with her former bank, Protocall's Janis LeBude never knew who her branch manager was. "They just sent out a different loan officer each time the credit line needed renewing," she recalls. Jean Manary, president of State Credit Inc., an accounts-receivable-management company in Painesville, Ohio, wishes she could have "just one person assigned to deal with me for all of my services." The branch manager she knew left her bank, and her loan officer was recently transferred 30 miles away; now she doesn't know whom to contact. Her latest strategy is to call up a receptionist she's befriended at the bank and ask her to direct her to the appropriate person, depending on the nature of her call. "I can get what I want -- loans, lines of credit, leases," says Manary. "It's just a hassle!"
How close you want to be with your banker is, of course, a matter of personal preference. But most entrepreneurs agree that a solid relationship of some kind is essential. The number one reason cited by TEC survey respondents who had switched banks in the past five years -- ahead of "didn't understand my business" and "refused to expand line of credit" -- was "changed key officers too frequently." Among the switchers: Donald Boyken, of Boyken & Associates, who was assigned three different loan officers in eight months; and Robert Linford, president of the Linford Co., a construction company in Oakland, Calif., who had six loan officers in five years.
Company owners who do have a relationship with their banker still have very different ideas of what makes for a healthy one. Business-insurance broker Fred Armstrong likes the fact that he knows his banker well and doesn't have to see him on a regular basis: "We just make excuses to meet from time to time." On the other hand, Victorian Papers' Randy Rolston is glad to have a personal as well as a professional relationship with his banker: they meet for lunches, social dinners, and business occasions. Cindy Koehler, executive vice-president and general manager of Applied Computer Technology, can't see her banker unless she gets on an airplane. When her fast-growing $13-million computer-networking business, a three-time Inc. 500 company, outgrew its local bank in Fort Collins, Colo., Koehler found the best bank to serve her was in Minnesota (a branch of an Ohio-based bank, actually). "The East Coast time delay is the only glitch we've encountered," she says.
A number of company owners have had success with banks by seeking out kindred spirits -- fellow entrepreneurs, in other words. Entrepreneurial bankers? That may sound like an oxymoron, but they do exist. David Mason, a regional Entrepreneur of the Year winner in St. Louis, has been with the same bank since his six-year-old architecture and engineering business, David Mason & Associates, was a start-up. He credits the bank's openness to entrepreneurs to its own entrepreneurial origins: the bank was started 30 years ago by a visionary member of the community and has involved local businesspeople on its board and in executive positions ever since. "The medium-size entrepreneur is the target of this bank," says Mason. "It knows its market well."
There seems to be no consensus among small-company owners about whether it's best to bank with a small or a big bank. Some like the personal attention of a small community bank; others prefer the sophisticated cash-management or on-line services of a large regional or national bank. David Daly confirmed that recently in a straw poll of fellow TEC members in the Seattle area. Among those who had switched banks recently, half had switched from a local small bank to a large one, and half from a big bank to a small one -- and both camps swore it was the best thing that ever happened to them. "Just goes to show you it's not the banks; it's the people," says Daly. "Banks are beginning to learn that, but I don't think they've internalized it yet."