When Justin Smith, president of 63 U.S. Bank branches in Southern Idaho and three in Eastern Oregon, goes home at night, he worries about the bad guys trying to hack into the bank’s electronic records or steal his customers’ credit card numbers.
He says the bank is diligent about protecting its electronic systems, but the hacks keep coming.
Smith, 45, grew up in Boise and went to work for the bank after graduating with a business degree from the College of Idaho in 1994. His mother, Connie Smith, spent 25 years with Idaho First National Bank, which later became West One Bank, so “banking was a natural career for me to go into,” he said.
Hired as a manager trainee, Smith worked his way up from a teller at the Overland and Five Mile branch in Boise. He went on to be a credit analyst, relationship manager and team leader. In 2014, he became the bank’s Western Idaho regional president. Last year he began overseeing branches in Eastern Idaho too.
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U.S. Bank, with Treasure Valley deposits of $2.3 billion and climbing, is the second-largest bank in the Valley behind Wells Fargo, according to the Federal Deposit Insurance Corp.
Q: What are your responsibilities?
I’m responsible for growing loans and deposits in the region. But I’m equally accountable to maintaining a high level of portfolio quality.
Part of my responsibility is serving as the face for the bank in the area. I believe strongly in making sure we give back to the community, and we encourage our employees to give back as well.
Q: Do you feel your background in the Treasure Valley helps you?
I do. Growing up in the area, I understand the changes that have taken place in the Valley. I know a lot of people in the Valley. I know a lot of the organizations.
Q: How have things changed for the bank since the 2008 recession?
Loans have continued to grow since the recovery began. But the pace of that growth is slower than prior to the recovery. I think customers are more cautious in the amount of debt they’re taking on.
The biggest change we’ve seen is on the deposit side of our business. That’s grown significantly since the recovery began [up from $1.7 billion 10 years ago]. Customers are keeping more liquidity around themselves as a safety net in case the economy does slow again.
When you look at those two factors, I think the growth we’re seeing in the economy now is much more sustainable than it has been previously, primarily because the growth is not all based on increased leverage.
Q: How have those deposits affected the bank?
Our challenge is to turn them into earning assets. That’s led to aggressive pricing within the lending market, which has been a benefit for borrowers.
It’s been a challenge for savers. Interest rates on money markets and savings accounts have remained low.
But I think the amount of activity in the market has been very good. I’m really optimistic on the economy within the Treasure Valley.
Q: What kind of loans does your bank offer?
We do all types of consumer and commercial lending. Our consumer portfolio is primarily mortgages and home-equity loans. Those have been growing.
Other retail loans we make are typically auto loans, RVs, personal lines of credit. Those have been flat to slightly decreasing. There’s a lot of competition, and a lot of dealers are making loans to consumers.
On the commercial side, we’re involved in real estate, construction, manufacturing, equipment loans, health care, agriculture. We’ve been seeing good growth in all of those areas the last several years.
Q: How has regulation affected the bank?
We have a lot more resources dedicated to working with regulatory agencies that oversee us. I believe in fair, responsible and reasonable regulatory reform, especially when it protects consumers. But I also believe that it needs to be balanced, to allow financial institutions to operate efficiently and effectively. There are increased costs associated with regulatory reform. It’s one of the challenges banks are facing.
Q: How have those newer regulations affected the industry?
I hope it is bringing back confidence to the industry.
On the mortgage side of the business, the truth-in-lending disclosures were changed so banks have a more uniform way of disclosing rates and fees to consumers [that] allows people the ability to compare rate options between banks. That consistency, I think, is good for the industry.
There is more income verification taking place.
Those are all good things.
Q: How would you describe the growth or potential for growth in the Valley?
I think it’s going to be stable growth. I don’t think we’re going to see large jumps. That’s good. We’re seeing new businesses move into the Valley, which provides new job opportunities for employees.
Q: What keeps you up at night?
I’m always worried about making sure we’re working our top talent and giving those folks opportunities to advance their careers. I am very fortunate to have such a great group of people around me.
The other thing I would say is we have seen the amount of fraud or fraud attempts increasing the last several years. Everything from scams to identity theft. And so, my advice for folks is that they have to be extremely careful with whoever they are giving their financial information to. And they really have to verify that person is who they think they are. Customers should also monitor the activity in their accounts on a regular basis.
Q: What’s the biggest challenge or problem you see in the Treasure Valley today?
We’re generally asked two questions from potential businesses moving into the area.
The first is about traffic, especially along Interstate 84 and whether there are going to be any new transit options. I know our city and county officials are working on those, and I have total confidence that they’re going to be able to figure out solutions.
The second is whether the Valley has a sufficient workforce to meet their needs. We’re very lucky to have the university and college system here. The College of Western Idaho has given us new options around workforce development. It’s just a matter of making sure we’re addressing those needs for developing training and education to meet employers’ requirements
Q: How has mobile banking changed things?
I believe we will continue to see rapid advancement in that technology. It’s one of the challenges banks will have in the future — keeping up with the costs associated with technology.
But at the same time, banking will always be a people business. Customers want to be able to come in and talk to a person in the branch. While we’re making significant investments in technology, we’re also making investments in the people side of our businesses.
Edited for length and clarity. This article is part of special coverage of banking in the Oct. 18-Nov. 14, 2017, edition of the Statesman’s Business Insider magazine. John Sowell: 208-377-6423, @JohnWSowell
About U.S. Bank
U.S. Bank is based in Minneapolis. It is the fifth largest commercial bank in the United States and has about $419 billion in assets. The bank has 3,164 banking offices in 25 states, with 96 branches in Idaho. U.S. Bank went from the 14th-largest bank in Idaho to the then-largest when it merged with West One Bank in 1995.