It was earlier this spring, about a year after the long-delayed merger between Provident and Lakeland banks was finalized. That’s when it hit Provident Bank CEO Tony Labozzetta: He couldn’t tell which employees came from which bank.
And he loved it.
“We had a big summit, and I was looking around the room, and it wasn’t old Provident and old Lakeland — it was just Provident,” he said. “The merger approval was protracted, longer than it had to be, but it’s all behind us now — and that’s all that matters.”
Labozzetta credits company cultures — that is, having similar cultures at each bank before the merger — for easing the integration after the merger.
“It was well executed,” he said.
And he said merging Provident (at approximately $15 billion) and Lakeland (approximately $10 billion) created more than just a $25 billion bank, it created what Labozzetta calls a “super community bank” — one where the sum of the parts is far greater than the individual pieces.
“We can serve customers in so many ways,” he said.
Being able to do so — and actually doing so — are two different things.
“Scale matters,” he said. “Running a $25 billion institution is not the same as running a small institution. Scale impacts your day-to-day operation — the amount of data, the amount of technology, how decisions ripple through a company.”
Labozzetta, having worked at a larger bank previously, understands the difference — which makes him the ideal leader of the new Provident.
“When you’re small, you can see all the way down in the organization,” he said. “As you get bigger, you can only see three-quarters down. When you get to our size, you can only see the top layer.
“It requires a tremendous change in talent capabilities. It requires a tremendous change in processes. And your risk management has to really amplify, because now you don’t just have one niche business, you have many.”
Labozzetta said a number of key hires — including adding Bill Fink as chief lending officer and elevating Tara Brady to chief experience officer — join an already stacked lineup and have the bank in a great position moving forward.
He recently discussed all of this and more in an hourlong interview with BINJE. Here’s more of the conversation, edited for space and clarity.
BINJE: Let’s quickly touch on the merger, which took 18 months after it was first announced. What was the impact of that?
Tony Labozzetta: You had two organizations, that were wonderful on their own, coming together. In essence, it should be one plus one equals three, but the political environment presented challenges — which should not have been the case.
When you’re going through it, it seems like you can’t make it. But, when you have two very strong, high-performing organizations, with culture and character and guiding principles that are extraordinary, you make it.
The beautiful thing is that it made us a lot stronger than we would have been if we didn’t go through it.
BINJE: You’re a veteran banking executive, one well-versed in all aspects and trends in the industry, but you keep coming back to culture. Talk about that.
TL: Culture means everything. You have to have clarity of vision and a strategic plan. And you need clarity of message. Everybody knows where they have to go and what they have to do.
It’s like a good symphony, where the trombones know what they have to do and the strings know what they have to do. And the best part is that they don’t get in the way of each other and are excited when the other does a great job.
Everybody at Provident loves it when their colleagues are doing the right thing; it inspires the rest of the organization. That’s great culture.
BINJE: Of course, banking matters, too. Talk about all the things you can do as a $25 billion bank.
TL: If you look at us today, we’ve got health care lending, (asset-based) lending, warehouse lending, (commercial & industrial) lending, middle-market lending, commercial real estate lending, small business lending, (Small Business Administration) lending — and a credit group. We also offer wealth management and insurance services.
All these verticals come with different elements of risk.
So, as you get larger, you have to have more governance, which means you have to empower people more than you did before.
If I try to make all the decisions at $25 billion that I would have made at $7 billion, we’re going nowhere fast. So, you empower people, and you make sure people understand the structure that needs to come with that empowerment. That’s part of culture, too.
BINJE: Talk about some of your key leaders.
TL: We’ve created a wonderful dynamic of talent, with the addition of Bill Fink, a terrific guy with wonderful character that brings a ton of experience in both subject matter, expertise and leadership, but, more importantly, he aligns perfectly with our guiding principles in the way we want to operate.
“My philosophy is not complicated. You create advocacy for life. The rest takes care of itself. We’ll make money. We’ll have good employees. We’ll have good customers. We’ll have strength in the community. But it all starts with culture. That’s the secret sauce.”
You add him to someone like Ravi Vakacherla (chief digital and innovation officer), who runs our IT and operations side — combined with the talent of our executive leadership team.
BINJE: All of this is helping you bring a $25 billion product to the marketplace. What does a bigger, better Provident mean for consumers?
TL: I think the message I would share is that we’re more than 140 locations augmented with a digital platform that is best in class for our size, one that we’re continuing to make better, so you can conduct your business anywhere, anytime — frictionless.
Well-positioned branches will continue to remain an important part of our retail strategy. We want our customers to know that they have a choice of channels — and that we have the scale to be able to invest in and improve those channels.
Our scale has created a strong bank with a fortress balance sheet that is going to be stable and secure, which is what people want to hear from a bank.
BINJE: Which is what businesses want to hear from their bank. Talk about the role Provident wants to play in the business community?
TL: We’re building out our small business banking because we know every dollar we lend to business is an accelerant in the community. Those businesses grow, they create jobs — and communities benefit. That’s the virtue of why we do this; it’s one of the things we’re proud of as bankers.
We’re not the fat cat guys trying to make a fee. We’re the guys trying to deploy the resources to help someone meet their financial journeys, build their business and create value in their communities.
With this merger, we’ve been able to expand our diversity of our products, which include a wealth group and an insurance agency. That’s an extraordinary value-add for our customers.
BINJE: And now you can do that at 140-plus locations. We have to ask — are there more locations, more mergers, coming?
TL: The first rule is, you have to grow organically. If you can’t organically grow and you do an acquisition, you’re masking your problem — because if you can’t grow at $25 billion, how are you going to grow at $30 billion? I’ve made everybody aware; I don’t want to be the steward of something that’s going to unravel.
That being said, I think we have the growth engine in place to be able to grow. The timing has to be right, the numbers have to work and the cultures have to align.
BINJE: You may need to leave the state to find that moving forward. Provident proudly says it’s the second-largest bank headquartered in New Jersey — but is it one increasingly looking to stretch outside the borders?
TL: Our roots are New Jersey, but we run a regional model. I would call us a ‘super community bank’ that has come up with a customer-centric model that’s very strong.
We always will be a Jersey-born-and-bred bank, starting in 1839. We’re proud of that immensely. It’s a point we want to shout from the hills. But, like any company, you have to grow or you perish. Our next acquisition could be in Pennsylvania. It could be in New York. It could be in South Jersey. I don’t know where that’s going to be, I just know it’s going to be the right cultural fit for our company.
BINJE: Which takes us back to culture.
TL: We are an employer of choice because of our incredible culture and a set of guiding principles that we are rabid about. They’re not a la carte. They’re not once in a while. They don’t apply to certain people and not others. When you have a strong culture, everything else follows.
My philosophy is not complicated. You create advocates for life. The rest takes care of itself. We’ll make money. We’ll have great employees. We’ll have great customers. We’ll have strength in the community. But it all starts with culture. That’s the secret sauce.
For information about Provident Bank, go to provident.bank.
