Thread regarding State Farm Insurance layoffs

Like a good neighbor, let me fraudulently pull your credit.

This is what happens when you try putting insurance people in charge of banking operations. EM in all of his glorious compliance background missed some obvious blunders by these buffoons in STL. The STL folks were always obstinate whenever we tried looking at what they were doing behind the curtains. But, after JC and ME were retired, it got worse by putting insurance guys in.

Read the finding, people. It explains the mess that this bank is very clearly. Hard credit pulls on customers without their consent and no means for remediating. Unbelievable that this isn't getting any news coverage.

At least I guess they get to mark the MRA closed. They were very fortunate to have dodged a hefty fine.

No fines were imposed, so it's a reputational hit more than anything. And SFB gets to mark an MRA closed.

https://www.consumerfinance.gov/about-us/newsroom/bureau-consumer-financial-protection-settles-state-farm-bank/

The bank just got in more trouble with their settlement with the CFPA as they continuously violated the Fair Credit Reporting Act. This had to be a huge fine considering this has been an ongoing problem with the bank. Check out the Bureau of Consumer Protection to see details.

@1fwkm

Exactly!! SFB was doomed from the beginning because they were not monetarily competitive with the major players and execs were stifled under the archaic leadership structure.

Big dog bankers would not have joined a bank that rolls up to a mutual insurance company. They want higher salaries and bonuses, as well as stock options. They also want autonomy in their decision making, which is severely crimped when you need approval from another executive layer. Thus SFB ended up with sub-mediocre Bank Presidents and AVPs.

I get why State Farm started Bank. It was the booming late 90s, post GLB, in which dreams of insurance/banking powerhouses were the rage. SF would have been better off sticking with something modest like a policyholder credit union. That could have helped with auto retention with much lower risk.

@1dtlv

One more if...

If the original team had hired people with big dog experience, instead of small time bankers with dreams of national scale.

@1dtlv

The real shame is that Bank could have been a shining profit center for Mom Mutual, if enterprise had stayed out of the way.

And, if they had not pushed their enterprise people into roles they knew nothing about.

Bank leadership are uninterested in suggestions for improvement. They have two mandates until they can figure out how to divest themselves of Bank. First, as noted earlier, is to contain the Compliance tire fire so it does not engulf Bank and threaten the reputation of Mother Mutual. Second is to cut costs and run a leaner operation going forward to minimize financial problems.

I believe any notion of Bank being a shining profit center for the Enterprise is gone. The history of insurance companies running banks is shaky, at best, and The Farm is no exception.

Anyone else feel like this bank is a giant mess but don't know where to go with suggestions for improvement?

The fact is, this bank is a joke. SF knows it and has known it for at least a decade. They didn't really care until the compliance issues were so prevelant that it could've hurt mother mutual, left unchecked. The clown who remains in exec that everyone is upset about is a joke but that is appropriate for the thing he is plugged into. If you want a legitimate career leave sfb. Whether that's within the enterprise or external. The clown and his minions can't leave. No one will take them. Maybe that's why they've lied, cheated and stole to get the positions they have. It was the only way they could survive and their too dumb to realize the truth always comes out eventually. Keep this conversation going people. We deserve better.

Sure seems like there's enough of us that recognize who the ring leader of problems is.

Site rules. Names and other personally identifiable data is not allowed. Site admins also don't allow personal insults. Can check the full list of site rules in the footer. Or you can just google it, what's allowed and what's not has been already answered multiple times on forum pages for other companies here.

At least it's a step in the right direction.

Is it true? Did Christmas come early? Can I feel like this bank has a chance finally?

Wait, I think I answered my own question.

Here's a good strategy let's fire all the incomptent leaders and replace them with the meek ones who pandered to their ridiculousness and have no idea what they're doing plus are absolute yes men and treat others like sh|t. That will fix this bank...

@Vuaq

I'd go one step further. SF is the cancer in SFB.

The culture and mindset within SF began killing it as soon as it was conceived. I just wish I had realized it 18 years ago, before I let it ruin everything I had worked for.

If you are not growing, you are dying.

RIP SFB.

I also noticed that loan production, including cards has been flat. I am not sure it has grown in the last five years.

https://cdr.ffiec.gov/public/ManageFacsimiles.aspx

The call report was online yesterday for the whole world to see. www.ffeic.gov

Nsiq- how would you know that. The call report for 3q is not publicly available for several weeks. Posting inside info or fake news?

The bank had $22M net income on $17B of assets for a whopping 0.13% ROA. Bank Capital has gone down $11M as well due to changes in unrealized gains. NIM was okay at 3.51%...maybe a little low since about 20% of interest income comes from cards.

Charge-offs were 0.62% which is pretty high in my opinion given the lower NIM.

Here’s the kicker and the reason the bank is okay for awhile. $30.8M in Agent Compensation (meaning the agents got to keep 50% more than the actual bank), and $39.9M in “Parent company allocated expenses”, so realistically the parent got to keep almost double what the bank did, but as far as bottom line consolidated goes the bank kicked in over $60M.

Call report will be filed today and then the results will be online shortly after. My guess is $15-$20M in net income. Interest rate increases should benefit the cards portfolio and salaries are way down from cuts.

I don’t think performance will dictate if people have their jobs. The bank could show a profit but still be changing directions and cutting bodies.

OR

The bank could show a loss but their obligations as a federally chartered bank will require them to have bodies in seats for the unforeseen future.

So ... What are our q3 results? I don't trust anyone in leadership so the best thing to go by to figure out if I'll have a job next year is performance.

Jg1h, are you serious?

Itoz - ominous post. What happened this week that caused you to feel this way? How bad can it really be with the new management?

Another week in the bag at this hell hole of a bank. Keeps doing a great job of retaining sh|tty "leaders" and chasing out any decent ones that get s---ered in.

Has anyone seen 3Q bank results?

All things considered SFB is still a “well capitalized” bank even though capital has been decreasing due to low/no profits.

Yeah that capital came from mutual and the bank has actually even lost some of that $2B. The OCC doesn’t care where the capital comes from they just care that the tax payers and depositors won’t lose their money. Since capital is based on relation to risk weighted assets, and the Bank has had no asset growth their capital level remains strong and as long as they stop violating compliance laws the occ will continue to allow them to operate.

@zhyh

They are a federally chartered bank. They cannot simply close up shop. In my estimation, they are shopping a sale to another bank to buy the "assets" while trying to maintain the customer relationships. It is not a quick process.

How does this mess of a bank keep going like this? What is going on??? Anyone know?

Current Chief Risk Officer didn't create the mess. He was one of the few AVPs who was competent. He was likely sent down by E12 to Bank as CFO to give them an honest assessment of Bank. The old Pres gave them nothing but sunshine and BS and that's why our finances and compliance issues spun out of control.

Goodbye sfb

To say any one person is the issue is over simplifying. To say his approach of promoting pretty and obedient boys and girls is part of an overall cultural disaster is fair. The choice to always promote regardless of experience and results is also a huge problem but not one unique to sf bank.