Transactions Magazine sits down with former PACB President & CEO Frank Pinto.
Frank Pinto began his career in Philly politics. After a stint as a legislative operative, his path turned to PACB, where his political savvy and optimism helped mold a respected but quiet organization into a formidable force.
Transactions Magazine: Take me back 26 years to your first week on the job working for PACB. Did you ever see yourself here?
Frank Pinto: No, I didn’t see myself here. I’ll take you back twenty-six years and two weeks. One of the caveats when I took the job was cleaning up my appearance. I shaved, reluctantly. My wife had never seen me without a beard, and my kids were mortified. One was three and a half, the other a year and a half old. It was traumatic [chuckles] and I didn’t realize I was so fat!
TM: Who told you to shave?
FP: Keith Clark. Subtly. Indirectly. Keith has been the conscience of this organization as long as I have been here. He has such a feeling and such a passion for the banks. He subtly brought it to my attention. So I shaved.
The first day on the job was a banking conference in Hershey. A lot of these people who hired me had no idea who I was. Completing that first day was a legislative trip to the Capitol Rotunda. So we went into the Rotunda and we were going to visit our different senators and house members. Many of the bankers were politically naïve, but that experience was one of the assets I brought. We went into the Rotunda, and Jack Seltzer, Speaker of the House, was walking by and I yelled out “Yo, Jack!” He spun around and he said “Frank!”, because he recognized my voice. And then he looked dumbfounded. “Where the hell is Frank?” “I’m over here Jack, I’m waving to you.” And he said, “What happened to you? You look like…” then he used an expletive. I said to him, “Well Jack, I’m a banker now. Look – I have a fancy suit, a tie and I’m clean shaven!” And he looked me over and said, “Well you still look like hell!” [chuckles] And then Monte Miller from Elderton, who actually hired me and was the president of the Association, looked at me and he said, “Maybe you were right [about the beard]”. And I said, “Yeah, sure I was right.” I said, “as long as I continue to be who I am, we’re going to be successful.” And that has worked for 26 years.
TM: What were the bankers looking for, and what did they see in you? What did you bring?
FP: I think it was the fact that I had energy and a passion and somewhat of a knowledge in relationships. I had worked in the Senate for nine years as the chief of staff of the President of the Senate. I knew a lot of these guys intimately, from having worked on their campaigns perhaps, or having worked on their legislative priorities. So I really had a firm setting in the Senate in terms of relationships, and I knew enough guys in the House.
PACB was a young fledgling organization. It didn’t even have a PAC when we started. How can you be a player in Harrisburg without having some political relationships, without having a PAC to at least open some doors? So I think what I brought was a lot of energy, a lot of creativity, a lot of passion and drive, because I really felt good with these people. They are the salt of the earth. These men and women were just the heart-blood of their communities. Some people might have thought they were just rinky-dink guys from a small, small town. Guess what? Collectively they were powerful. Never diminish who you are. Say your bank has $100 million in assets. Then if I had your $100 million, and someone else’s $100 million and another bank’s $100 million, pretty soon I’ll be at a billion. And I said “let’s look collectively at who we are,” and right from the beginning, we were the most powerful force in the Commonwealth, from a collective perspective. We had at that time maybe $55 billion in assets. That made us the number one ranked financial institution. Of course that was all segmented among 300 institutions, but collectively that was an argument I was able to articulate.
TM: Staying with the early years a bit, what was it like? What were the characters like? What was the color like? What did it feel like to be in Harrisburg in those first days?
FP: My very first days were in the 70’s. So you have to really distinguish the 10 years that I’m on the inside vis-à-vis being on the outside. The small community banks never realized that they could have such an impact on anything, because they’re always the second child—second children to the bigger banks, the bigger financial institutions. And PACB at the time was really small. It was just a two person operation with less than a $100,000 budget and half of it was my salary. So we didn’t have anything there to offer. Instead of asking me what we were going to do, I would ask them to tell me what they needed, and I would translate that into an action plan. So they talked about certain things. They talked about how they needed education, they needed some products and services, they needed collective buying power to do some things.
They needed to have networking opportunities, because they learn from each other just as much as they learn from the Madison Avenue boys. They learn from each other from experiences – good and bad. So they loved the networking opportunities and they talked to me about a convention. It’s one of the funniest things in the world. See, I had only been to political conventions. There was a lot of drinking, a lot of partying, and a lot of debauchery. There was very little family environment at a political convention, especially in the old days. I had no idea what to expect with the very first banking convention that I was involved with. Well, the banking conventions were totally a family environment. Their wife of 35 or 40 years was right by their side. They talked about a prayer breakfast. A prayer breakfast at a convention? Are you nuts?
But it’s about the most popular thing we ever did. We started with that and the networking grew and grew and grew. All of a sudden, a meeting that might have had 150 people suddenly had 200, 300, 400 — till eventually we got to 1,000. That didn’t happen because of me; that happened because of them. They asked for networking opportunities. The only thing that I brought was the PAC.
I told them they needed a PAC. They said they hated the idea of PACs. I said, “well, you have to. If people come to me and ask me for $100 dollars, I need to be able to say I can give them $100.” But the one thing I told them right up front is to never ever believe that money gained you anything – except maybe an open door. We learned that right from the start. Our PAC never really generated the monies the big bankers have. The early days were very interesting. We made a lot of mistakes. We bumbled and fumbled. But we moved forward.
TM: What was the culture like inside the walls of the Capitol in the ‘70s and ‘80s?
FP: Well I think in the ‘70s we were still coming off of the aftermath of the Shapp administration where there were a number of indictments. I remember when Thornburgh came in. A prosecutor has a certain mentality, not unlike perhaps this governor [Corbett], and prosecutors do not compromise. They go for the wall and they follow it. So you had that ‘take charge’ atmosphere. You also had a divided legislature. If you have the Senate and the House under one party and the governor under the same party you can get a lot done. It’s difficult when the fraction and factionalism that take place in the chambers can prevent progress and reform.
In those days, a lot of things were different, and I was part of that process. You got your parking based on seniority. So if you have served there 36 years, you were right next to the Capitol door and I made sure that happened. Even if you were an invalid, I couldn’t get you next to the door. If it was your freshman year, you were going to be in the worst parking spot in the world. When it came time for assignments for rooms, it was done the same way. You got the big room with the big windows with the plush carpeting. That all changed. The caucus which was all dominant became less dominant, except for some of the strong personalities. If you had strong leaders, that could change things around.
We were always blessed that we had chairmen in the influential committees that I had worked with. Senator Hall was a pillar of banking. He was the chairman of the Banking and Insurance Committee forever. When I served as chief of staff, he was there, and then when I became the president of this association he was there. He helped me get this job. I had good friends in the House on the Commerce Committee. They were just great, great people who understood that the community banks were important. They didn’t always give you everything you wanted, but they kept their doors open for you.
What we did took a period of time because a lot of our guys didn’t like politics. They thought it was distasteful, but they learned to accept it. They’d go down to Washington and Harrisburg and schmooze with these people. And most would ask me “how can you do this Frank?” I just said “it’s in my blood.” It’s part of my DNA. I am a politician, I’m a political animal. I enjoy it. And they’d ask “how can you always feel that way?” I said “because [politicians] have choices to make the same way you have to make choices. They have constituencies the same way you have customers. They sometimes make the right decisions, they sometimes make the wrong decisions.” My motto to our guys was ‘we can disagree but never be disagreeable.’ Because once you close a door, that door is forever closed. So we had some pretty interesting battles early on.
TM: What are the understated values that influence the political process? What are the things you have learned to have as part of that DNA to be successful in the Capitol over the long term, not just over a 2 year election cycle?
FP: It’s really about one word– integrity. You have to be straightforward with these people. They’re people that need to know exactly where you stand and why what you stand for is important.
You know, some people said I’ve done nothing in 26 years, and some would look at that as a weakness. I’d say that’s a badge of honor because the legislature has done nothing to hurt us. People have said there has to be payday lending, ATM regulations, surcharges. None of those things happened, because I believe in having your word as your bond and communicating that consistently. People tend to eventually know that you’re a straight shooter. And they’re having that reinforced at the local level. The most important thing to remember is that a lobbyist is still an individual. It’s the core behind you – that’s your army – and our core was the local community bank presidents, the vice presidents, the tellers. All those people would say nice things to their local elected officials and hopefully they’d hear it. Now, there were various factors that sometimes prevent the right vote being taken, but you have to understand that too. We lost some battles, but nothing that was too dramatic to hurt our bottom line. I said back then our challenge is to not only survive but to thrive, and our guys have done that.
TM: You hinted a little bit at over-regulation and the storm that community banks are facing. What should the next generation or the current generation of community bankers do to thrive?
FP: That’s a real challenge, especially when some of the regulators have been telling us that if we’re not $500 million or more in asset size we’re going to go under. That’s 90 percent of our constituency that they’re saying will go under! I think what’s happening in Washington is that you have a great disconnect. Yes, there are flaws that have taken place, but from a systemic risk perspective, the community banks were never part of the problem. For the first time we actually now have a segregated system of regulation, where now if you’re $10 billion or less or $1 billion or less you’re going to get certain exemptions, based on that number. But what Washington has to learn is that an exemption on paper is not necessarily one in reality, so they have to be vigilant and diligent to make sure that what they say takes place.
I used to teach a graduate course in government regulations at the University of Pennsylvania a long time ago in another life. We talked about the overzealous regulators and the CYA mentality that sometimes exists – “if this fails, I get the burden, I’m stuck with it.” Well, regulations are designed for a purpose and they’re not designed just to slap your hand, they’re trying to facilitate progress. But if regulators believe that they’re over there just to get us all the time for this or for that, progress doesn’t take place. So I think that what has to happen is that the community bank has to persevere and say – “I’m not going to take this. I’m going to fight for exemptions and so I can get the right clarity and guidance.” At the same time, they have to say- “I’m going to push for that, but whatever comes I have to be prepared to deal with it because I’m stronger, and if I’m not here my local community will suffer.’ And that’s the most important thing. Everybody realizes that if you take the community bank out of the community there’s a significant loss.