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SETTING THE
GOLD STANDARD
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By Kevin Kipp
In the process of earning his bachelor’s in History from Fairfield
University, Joe Hasten, vice chairman of corporate banking at U.S.
Bancorp, became a devotee of British prime ministers. Several of
their portraits adorn his office. He most admires Winston Churchill—who
doesn’t?—but he even commends the “thoughtfulness” of Neville Chamberlain.
He must have picked up some facility with numbers and dollars to
go with his Anglophilia along the way, too. Hasten is one of the
top executives, wearing multiple hats, at the nation’s eighth largest
banking organization with some $174 billion in assets.
FROM THE BOARDROOM (Left to right): JOSEPH
F. IMBS III, regional chairman, commercial banking
– midwest; JOSEPH E. HASTEN, vice chairman;
CHRYSTAL RILEY-STARK, vice president, district
retail manager; CATHERINE M. MYERS, senior
vice president, retail administration; KIRK A.
PORTER , executive vice president, specialized
lending |
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Customers of the corporate banking area, which Hasten directs are
LARGE corporations, “which as a matter of policy we don’t name,”
he says. “Meanwhile,” he nods, “it is a matter of record that Patrick
Stokes, president of Anheuser-Busch, and Craig Schnuck, chairman
and CEO at Schnuck Markets are on our board of directors.”
Hasten is also in charge of specialized lending and industry customers,
as well as all wholesale product development and sales.
“A specialized industry would include agribusiness, health care,
certain broker-dealers, or mortgage bankers,” Hasten explains. “And
wholesale product development and sales includes developing product
sets for, say, international commerce, cash management, foreign
exchange, capital markets—selling interest rate derivatives. We
develop, manage and sell all those products to business customers,
large or small.”
Besides all that, Hasten is also the market manager—meaning he helps
coordinate other operations, like retail banking and wealth management—in
St. Louis and also has responsibility for wholesale banking in Minneapolis
and St. Paul, Minn.
Additionally, he is a member of U.S. Bancorp’s office of the CEO,
its executive credit policy and asset/liability management committees,
as well as a director of U.S. Bank N.A.
Joe Hasten situated above the downtown U.S. Bank lobby. |
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“Essentially all of that means I report directly to the CEO and
have a seat on the executive management committee,” Hasten says
with a measure of cut-to-the-chase.
Hasten says he operates out of St. Louis for three reasons. “First,
it’s too important a market to not have a senior person physically
here.”
With $8.7 billion in local deposits in 2002, U.S. Bank leads with
a market share of 21.5 percent. They also have 102 branch locations—the
most—in the 13-county market that Hasten oversees.
“The second reason [that he’s based in St. Louis] is accidental,”
he continues. “When Mercantile Bank was acquired, I was here and
it made sense to keep me here.”
Hasten joined Mercantile Bancorp in 1995 as president of the St.
Louis bank, its lead bank, and of corporate banking system-wide.
He became vice chairman in 1999 for all wholesale banking when Firstar
took over Mercantile, and assumed the remainder of his titles with
U.S. Bank after it merged with Firstar in February 2001.
Hasten emphasizes that he wasn’t the only one to stay. “Remember,”
he says, “Mercantile was the largest franchise in St. Louis. One
of the reasons we’ve done well with changes—whether in name or ownership—is
that nine out of 10 people running our business are the same people
who were running the business since we were Mercantile. Our emphasis
was and is service. We’re good at it, and that’s helped us grow
faster than the economy.”
Citing his third reason for being in St. Louis, he says, “I love
it here.”
After graduating with honors from Fairfield in 1974, he returned
to hometown Chicago to pursue an MBA in finance at Northwestern
University.
When he signed on in corporate banking with American National Bank
(a subsidiary of First Chicago, now Banc One) in 1975, he moved
his graduate studies to the night division to take advantage of
the tuition benefit.
In his day job’s training program, Hasten met Jane, whom he would
marry in 1977. He received his graduate degree in 1978. (The Hastens
have three children: a daughter who graduated from Fairfield and
now works in Chicago at LaSalle Bank, a DeSmet grad in freshman
year at Indiana University and a sophomore at DeSmet.)
In 1984, Standard Chartered Bank, a British outfit, put Hasten in
charge of its Midwest operations. “I took the position because they
gave me my first big, no-boss-breathing-down-the-neck business,”
Hasten says, not because of their national origin.
In 1991, Hasten was promoted to CEO of Standard Chartered’s South
Korean and Indonesian businesses. He spent two-and-a-half years
in South Korea and 18 months in Indonesia.
He found immersion in the different cultures “enriching.” He was
also surprised that in both countries business was conducted “more
like how business is done here than not. In both countries clients
rely on accountants and financial advisers. And their need for banking
services is pretty similar to here,” he says, “although they have
a little bit of catching up to do on scale, liquidity and transparency.”
Other differences exist. The Koreans are every bit as formal as
the Japanese, with whom they do not get along historically. And
the Indonesians are too gracious to say no, even when they disagree,
which makes every deal a little fuzzy. In both countries, customs
call for extensive personal interaction before closing a deal. Here,
Hasten says, it’s the other way around: Close the deal, then socialize.
In one East-meets-West anecdote, Hastens tells of playing golf in
Indonesia: “On one of the greens we saw several natives with honed,
pointed bamboo sticks. I asked my host what they were doing. He
says, ‘Oh, they keep the elephants from walking on the greens.’
They can do a lot of damage. It’s hard to putt with an elephant
print in your lie.”
With 82-degree days, 81-degree nights and humidity lower than St.
Louis, Hasten says he was in no rush to leave Jakarta. But he had
met then-Mercantile chairman Thomas Jacobsen back in the days at
First Chicago. “He offered me a significant position. Mercantile
was a good regional bank with a good reputation. And I didn’t necessarily
want to spend my life overseas.”
Right here, right now, Hasten’s U.S. Bank job is a balancing act.
As senior executive in the market, internal demands are important,
he says, but they make it difficult to spend as much “time in front
of customers as I’d like. And I travel a lot, because we have major
corporate customers in other cities: Minneapolis, Milwaukee, Cincinnati,
Portland.”
U.S. Bank serves 24 states, from Ohio to the West Coast, Hasten
says, “but because I’m in St. Louis, our larger customers here see
more of me than our Portland companies.”
Bob Baer, president emeritus of UniGroup, the moving company conglomerate,
is one of Hasten’s satisfied customers. “When I was president of
UniGroup, U.S. Bank was one of our banks. I always found Joe accessible
and prepared for our meetings. And just as importantly, he was always
ready to ask the hard questions.”
When Hasten began his career in banking, success didn’t require
the discernment to know there were hard questions.
“In the ’70s, the feds heavily regulated the rates we could pay
for deposits,” he says. “And they regulated them low. So we were
paying three percent or less, and lending it to the likes of General
Motors for six percent. It wasn’t rocket science to make money on
a 300-point spread.
“It’s different now,” he says “The net interest spread isn’t guaranteed,
people cost more, and the dynamics are more complex. We’re still
regulated, but it’s more competitive. The 9-to-3 bankers’ hours
are gone.”
Despite higher personnel costs and other complexities, Hasten believes
banking is healthier now. “All business does better in a less regulated
environment,” he says “You are freer to compete in either product,
feature, functionality or your people.”
Some old-style bankers are gone, now, he says, and some have adapted.
“It’s purely my opinion,” Hasten says, “but a lot of the people
who adapted had a broad education, including a liberal arts component,
even if they have a business degree. In the face of rapid change,
that kind of education helps you rise to the occasion more readily
because you’re more likely to see it coming.
“We are also getting a different breed of banker now—more sales-oriented,”
Hasten says. “They understand competitive value and are smarter
and more prone to hard work. We pay more than two decades ago, but
we’re more productive. That leads to higher profit, and that drives
return on assets and return on equity.”
Whether new blood or old hands, Cathy Myers, senior vice president
of retail administration says U.S. Bank’s sales-orientation is one
of the keys to its ability to extend its lead in market share.
“We ask our team members to ask for the business every day,
all day,” says Myers who is responsible for $6 billion in deposits,
788 people and 74 branches. “We strive to make it an element
of pride: Why would you bank anywhere else? It has become something
of an addiction. Our people were asking family and friends over
the holidays, ‘where do you bank?’”
Myers also oversees U.S. Bank’s St. Louis small business for companies
with less than $5 million in sales.
“My job is to grow loans and deposits,” she says. “We do that by
focusing on our Five Star Service Guarantee. If I really wow you
on service you’ll do more business with us and refer business to
us.”
Myers enumerated the guarantees: “If you wait in a teller line more
than five minutes; if my ATMs aren’t up 24/7; if our customer service
line isn’t up 24/7; if your checking and saving statement isn’t
timely and accurate; if you call me before 3 p.m., and I don’t call
you back the same day; if any of these occur, I credit that customer’s
account with $5.”
Myers’ work is crucial to U.S. Bank, in part because retail banking
amounts to 60 percent of earnings, but also because consumer deposits—two-thirds
of the bank’s base—are what commercial officers lend.
Also crucial to the bank’s future is earnings growth, and here,
U.S. Bank looks to “wealth management.” It combines the asset management
function of personal trust with services for affluent folks, the
bank within a bank called “private banking.”
According to Paul Rhea, U.S. Bank’s senior vice president and regional
manager of private banking, he and Ed Higgins, senior vice president
and market president in St. Louis for personal trust, “are joined
at the hip. Our departments interact on a daily basis. They’re commingled,
so you can talk to a trust officer and a private banker in the same
office.”
While wealth management accounts for 12 percent of U.S. Bancorp’s
earnings, Rhea expects private banking to grow at 14–to-15 percent
and trust at 10-to-12 percent. “Other parts of the bank are doing
extremely well,” he says, “but in single-digit growth. History tells
us that the affluent portion of the market is growing at a faster
pace. There are millionaires out there who have never had the experience
before. They are the target for a lot of banks.”
And top executives at leading companies are the target of a lot
of organizations. Hasten serves locally on Saint Louis University’s
board of trustees, Civic Progress, the RCGA board, he chairs the
Greater St. Louis Economic Development Council, and he is vice chair
of the Missouri Historical Society board of trustees.
MISSOURI HISTORY MUSEUM EMERSON CENTER
Hasten serves as vice chair of the Missouri Historical
Society board of trustees. |
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Hasten says, “I serve on the historical society’s audit committee.”
Bob Archibald, president of the organization, thinks that might
be British understatement. “A vice-chairman is one of those positions
people get because of their involvement, commitment, and support.”
Archibald continues, “Yes, he brings enormous skill in understanding
numbers and financial assessments. But he has a really keen mind
that he applies to everything. And he has been there when I need
to talk with him about the issue of the day. Anytime you get someone
as insightful and committed as Joe, you hold on to him.”
UniGroup’s Baer—also a member of U.S. Bank’s St. Louis board of
directors—cites Hasten’s membership on the executive committee of
Civic Progress as additional evidence of both his executive and
personal skills. “Sometimes we get titles by virtue of our position.
But sometimes you earn it through what you stand for. I think Joe’s
in that category.”
Randy Weber, managing partner of Hazelwood & Weber LLC, chairs U.S.
Bank’s St. Charles, Lincoln and Warren Counties advisory board,
a regional version of the board Baer is on.
Like Hasten, Weber praises U.S. Bank for “keeping the people who
ran Mercantile Bank, keeping their decision-making local and keeping
their departments in touch with the communities they serve.
“What’s more,” Weber continues, “despite all the concern about the
flight of corporate headquarters in the 1990s, U.S. Bank’s level
of philanthropy in the region is greater now than it was as Mercantile.
That’s remarkable, and somebody deserves credit for it.”
Kevin Kipp runs Bubble Communications, a creative services and
community relations firm in St. Charles.
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