Magazine article American Banker

Decentralization Remains Central to Heartland's Strategy

Magazine article American Banker

Decentralization Remains Central to Heartland's Strategy

Article excerpt

Byline: Hilary Burns

Bruce Lee has visited all of Heartland Financial USA's markets over the last 60 days.

To do so, he covered vast territory spanning a dozen states, from Illinois to California and from Montana to Texas.

The gesture made sense. After three years of priming, Lee is set to become the Dubuque, Iowa, company's CEO on June 1.

The well-telegraphed succession plan for Lynn Fuller, who has led the $11 billion-asset company since 1999, also sits well with those who follow the serial acquirer, which has 11 bank charters. Fuller will remain chairman, focusing on future acquisitions.

"Having met with Bruce numerous times, you can tell he has a good working knowledge of Heartland's strategy," said Damon DelMonte, an analyst at Keefe, Bruyette & Woods. "I think he's going to be able to run day-to-day operations, as well as lead the organization with its multibank holding company structure."

Lee recently discussed Heartland's future, including its increased size and continued dedication to a multicharter model that many other banks have abandoned.

Here are excerpts of the conversation.

What are your top priorities?BRUCE LEE: The customer experience is our number one priority. Employee engagement and the culture are very important to us. We want to make sure we can retain that community bank culture, yet provide the products and services of a much larger bank. We do that primarily through technology solutions and being able to make investments that a $1 billion-asset stand-alone community bank would not be able to do.

As customer desires have changed ... we want to make sure we have a consistent set of channels around that customer experience. Whether they want to bank using their telephone, or the internet, or they want to talk to somebody in one of our call centers or branches -- we want to make sure that the experience is a consistent one throughout each one of the channels. That's what enables us to continue to grow organically and through acquisitions.

How dedicated is Heartland to having separate charters?This was really a model and structure that was Fuller's vision. It creates a unique model that allows us to focus on being a community bank in each one of the markets we serve under a separate brand. We believe having a local board, local management and local decision-making really creates a differentiation for our customers as we go to the market. And it's certainly my plan to continue with that. We've been very successful not only growing organically in each one of those markets, but we believe it's also an advantage in our acquisition strategy.

Heartland recently bought a bank in Lubbock, Texas. What makes that market attractive?First of all, Lubbock is a community of about 250,000, so we like the size of the market. We don't necessarily get lost in what's going on compared to Houston, San Antonio or Dallas. FirstBank had really great market share and a great leadership team, which will remain in place. We are just providing them with additional products and services and more resources, particularly around technology. It's also a regional hub for the medical industry, as well as a strong cotton industry.

Do you expect to make more acquisitions over the next few years? …

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