Thread regarding State Farm Insurance layoffs

Goodbye state farm bank.

Odds are your managers or directors don’t know anything which is why they aren’t sharing plans. The only people that do are the ceo and donkey puncher. They’re not going to share anything either. This bank is waiting for a marketing and sales miracle or simply the right time to unravel.

The cards portfolio might be worth something in a sale but nothing else. All those vehicle loans are fixed rate in a rising rate environment. The fixed rate liabilities are a bonus at least. So they’ll probably continue to operate at an 80% efficiency ratio until the market turns and the agents scorecards aren’t hurt by not having bank products removed.

When an organization goes through a major restructuring as Bank has leadership must step up the communication. What are the near and long term goals? What is the road map to achieving these goals? How will success be measured?

The fact that leadership have not divulged answers to any of these is unsettling. Don't hold your breath waiting for them to share their plans, if any exist.

My guess, as well. Holding pattern... Odds are the bank is no longer.

@gzcv - I was optimistic new Bank leadership would be more transparent and forthright in their communication than the old regime. My optimism was quickly squashed.

My guess is they are trying to determine whether Bank can or even should be saved.

What's going on in the bank? Any updates after restructure?

Mortgage is done. Anyone else hear this?

When's the next announcement regarding future state? Supposedly winding down by end of 2020...

In a large company there aren’t the time or resources to vet every potential future leader. You have to rely on the management, which sf did with the wet fart that was “readiness”. An entirely subjective system that moves certain people up and keeps certain people down. The result is an entire generation of leaders who have lost the ability to lead because they got where they are by following.

Bank is like the rest of the State Farm in that you must be well-connected to get a promotion. If you are someone with solid analytical skills and leadership potential, but lack a powerful patron, you will likely stay in the same place doing the same things. State Farm needs criteria for identifying future leaders outside of who has the best connections or is lobbying for it the hardest.

The bank should have brought some of the higher performing analysts and supervisors into leadership roles in the future state. No offense to the existing strategy director but they produced no results. So why not bring up a sharp thinker? I won’t say his name so the post doesn’t get flagged, but there’s a guy in Treasury who works on stress testing, but had regulatory experience and other areas who is smart and could have great ideas if anyone would listen to him.

If they were serious about the bank, they wouldn't have left any of the executives around. The fact that they have the two they do says it all. Simply there for congruency with the younger minions they direct as things are wound down. This is a disturbingly fascinating lesson in human nature. Find a good gig in the Enterprise or outside SF for not sure the health of your career but, also, your mental health. These mind games take a toll. Several with legitimate outside experience saw the writing in the wall and left around the turn of the year. Wish I'd listened to them. One in particular called it all out. He's now killing it and going to Harvard. Good luck, everyone.

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Where did the post go about the bank being wound down? That along with the one below referencing it make alot of sense.

Lending policies and procedures have already been an issue for the bank so that won’t shut them down since they’ve been working on fixing it for over a year.

Like the OP said, the issues the bank faces are the fact they just don’t make any money. No one knows they exist, the agents don’t care, the few people who do know are treated with poor service and poor systems.

The post has been deleted but whoever said the bank is being wound down is probably right. The new cfo was from the TIAA not a bank, and before that he was at MetLife where he helped unwind their banking arm. This is a guy who knows how to get a return on assets a company isn’t going to use for operations. The banks loans aren’t worth much in a loan sale in a rising rate environment so it’s about using their cash flows to purchase securities and other more liquid assets vs. pumping them back into loan growth.

I’m pretty sure regulators are already familiar with the bank’s underwriting practices and policies...

Once regulators get a grip on the bank's abhorrent lending underwriting practices and policies they will be on a short downhill slide to the end.

Run. Fast.

@bds is exactly right. Run far, far away. Employment in the bank or anywhere else in the company is shaky at best right now. If you lose your job in B-N, good luck finding another. And with the broad layoffs across the company, good luck selling your house at a reasonable price.

If everything is so bad why do people stay? If it truly is polishing brass on the titantic why not jump ship?

Looking for positivity? The Bank is still open. They are still paying salaries. After running down the cost of severance payments they may get a bump in NI due to lower payroll. Even after the QTD there still are some talented analysts and first line managers. Sorry, that's all I've got for you.

The bank is on it's last leg. The compliance issues will only get worse now with inexperienced leadership and also no experience in compliance and risk. Plus you don't want to be in Bloomington when the next round of massive layoffs happen.

Does anyone know if the bank will show a profit this quarter, or how fundings look? Need some positivity on here.

Stay far away from SF Bank...If you are IT, get on with SF systems area.

Honestly, there’s really no good departments left at State Farm to work in— anyone considering a job here should steer clear. It is a terrible place to work now.

The Board did not ask him to step down. In fact, he stayed on 1 year longer than his original/personal plan. That was to provide transition to JM. The compliance comments are accurate as posited. As is the approval for spending.

I’m not an MS apologist at all so all I’ll say is the bank needed/needs heavy capital investment and even as ceo he had to go upstairs to Tipsord and Joe for approval of how to spend the money “his” bank had. They always said no, so why work hard to stay on the treadmill of mediocrity?

One can be both experienced and incompetent. The Compliance issues became so bad under our old Bank Pres that we had to import a highly paid DC consultant to run Compliance. That was supposed to last 12-18 months but will be longer to clean up all the MRAs. The poor financials noted by the OP are a direct result of the former President's ineptitude. And the Board asked him to retire, so there's that.

I agree the new guy lacks experience but at least he isn't digging the hole deeper like the old one.

Poor earnings are a result of bad loans, which is a result of bad strategy, a result of bad leadership. Of the 99 banks nearest to sfb in assets, sfb had the 8th highest net charge-off rate in the second quarter. $22.9M or almost 1% of average loans. Compare that to only 1.1% loan growth quarter over quarter and you have a recipe for a failing bank, because as the op pointed out the efficiency ratio is awful and capital is going down as a result. If that capital figure gets below 10% of assets we’re in deep $hit.

Why do you say the old President was incompetent? At least he had bank experience. The new president is a life insurance guy who probably visits investopedia 10x a day to figure out what anyone’s talking about.

So on top of awful earnings and growth they also have compliance issues? I think I’ll withdraw my interest in the position. Thanks!

Do not join SF Bank. The Bank came perilously close to being closed in 2017 due to massive Compliance issues. They are trying to get Bank under control but after a massive restructuring people are scrambling to learn their new roles. It's a mess. And as a previous poster noted leadership is full of yes people who lack the courage to say and do what is right.

The old incompetent Bank President was asked by the Board to retire last year and his inept AVPs (outside of several yes men) were canned. They are making one last attempt to right the ship but I think Bank has 2-3 more years, tops.

Do yourself a favor and join a real Bank, not one that is an afterthought in a giant P&C insurance company. Allstate, MetLife, and Nationwide all ditched their banking efforts. State Farm is slow and loathe to admit mistakes but eventually their bank will disappear, as well.

I’m pretty sure the low net income is from paying out severance to people who were let go with restructuring. It depends on who is recruiting you and what you’ll be doing. There are good managers and directors, but for the most part you’ve got yes men or process pros (self described) who don’t understand how a bank makes money. Hint...it isn’t through PDC.

@Bds

I totally pictured Obi-wan doing the Jedi mind trick.

This is not the Bank you are looking for.