What do the NFL and Bank Owned Life Insurance Have in Common? Glenn Blackwood

Kelly: This is Part 2 of my interview with Glenn Blackwood, who was a member of the “Killer Bees”. This wasn’t the much feared Africanized bees, rather it was the equally feared defense of the Miami Dolphins in the early 80s.

 Greetings! This is Kelly Coughlin.

 Voiceover:      Kelly Coughlin is CEO of BankBosun, a management consulting firm helping bank C-Level Officers navigate risk and discover reward. He is the host of the syndicated audio podcast, BankBosun.com. Kelly brings over 25 years of experience with companies like PWC, Lloyds Bank, and Merrill Lynch. On the podcast, Kelly interviews key executives in the banking ecosystem to provide bank C-Suite officers, risk management, technology, and investment ideas and solutions to help them navigate risks and discover rewards. And now, your host, Kelly Coughlin.

Kelly:             Hello! This is Kelly Coughlin, CEO of BankBosun and program host. This is the second in a two-part interview series with Glenn Blackwood, a former NFL safety for 10 years with the Miami Dolphins and a current 25-year executive, board member and principal in the bank-owned life insurance industry with Equias Alliance.

In Part 1, I talked with Glenn about some of his experiences in the NFL and how his ability to face competition, sometimes quiet fearfully enabled him to have quite a successful career in the NFL and with the Dolphins and ultimately in business.

Glenn was coached by Don Shula, who instilled two things in his players: competition and integrity. Glenn said that Shula instilled in them the concept that winning wasn’t the only thing but winning with integrity was the only thing. And because of this, Glenn has become a very successful businessman.

I think Lombardi said, “Winning isn’t everything. It’s the only thing.” Well, that might work well on the gridiron but in the boardroom, integrity is equally important and as fierce a competitor as Glenn was and is now; he is equally fierce in his adherence to good business ethics and a high level of integrity.

In Part 2, we will talk about how Glenn works in the bank-owned life insurance business and why he is so successful with his clients and why his clients truly like working with him.

So Glenn, what’s your approach to helping community banks compete and succeed in this environment where risk, regulation and revenue creation can be so challenging?

Glenn:            Glad to be visiting with you. So the community bank has a niche that it fills in the ecosystem of banking, and I think the biggest battle with community banks is the regulatory environment they are having to deal with. They don’t have the scale that the big guys have to absorb it and it is a very difficult task for a community bank and this is just listening to all of my clients. And as you mentioned, I’ve worked probably 150 community banks in the southeast. And I stay in very, very close touch with those banks and it’s a common thing that their biggest battle right now is the regulatory burden that’s on them and the cost that it hits on them on an ongoing basis. And it’s very hard to get return to the shareholders, and I think that’s the biggest challenge they face.

Our goal and the way I’ve looked at it is I want to be an ally to them in helping them be able to be as successful as they can and one of the ways we do that – there are two primary ways.

One is helping them manage benefit expense. That’s the BOLI asset. And then, understanding when you put that on your balance sheet, there’s a lot more that goes into that than just sticking an asset on your balance sheet, which most bankers fully understand because there’s a regulatory issue, an accounting issue, a legal issue, etc.

And the other piece of it is helping them to put in programs that allows them to retain, reward and ultimately retire their key executives. They’re called top hat or deferred compensation SERP plans, things like that. And they’re there for a reason. A lot of people say, “Oh that’s just another perk for these highly paid executives.”

But the reality is, it’s not another perk. It’s getting them to a level playing field due to the restrictions that are imposed upon what’s deemed to be highly compensated, which is anybody making over, basically $120,000. They can’t put enough aside in their retirement plans due to these ERISA and IRS limitations on both social security and qualified plans.

So allowing them to have a meaningful retirement benefit that’s commensurate with what they’re doing for everybody else in the rank and file. One banker called it, it’s good parenting. And then the other piece of it is that you use those programs to retain those executives. Because they’re non-qualified, you can structure the vesting in a way that allows you to say, “Look, if you stay here Mr. or Mrs. Executive until a certain date, then you get this benefit, but if you leave, you leave it behind.”

So now, you’re doing something that’s balancing the playing field for them in benefits, but you’re also hooking them to the bank so that if they walk away, then they’re going to walk away from that benefit then there is economic pain for that. And that usually provides the deterrent for them going to greener pastures.

Kelly:             Curious about in a bank-owned life insurance business, you mentioned there’s a lot of moving parts there, and that’s what you liked about it. You’ve got the legal part; you’ve got the accounting part; you got the insurance part; you got the investment part; you got all sorts of components there. But simplifying the message in a sales process has got to be critical to any sort of complex financial sale. What’s your approach to simplifying the sales message? Not trying to be the smartest guy in the room, but trying to be the guy that simplifies the message, because I know you’re good at it. I’ve heard you. I’ve heard you talk, so I know you’re quite good at that.

Glenn:            I think the main thing for me is I want to be honest, especially if I’m working with a board. I want to be honest about what I’m laying out for them and I want to, I call it bringing all the skeletons out of the closet. I want to bring all the bones out. I want to lay it out there so they can understand their risk and understand the benefits that come with it as well. And then also understand what does it entail on an ongoing basis with these programs and whether you’re just putting BOLI in or whether you’re putting  BOLI and benefits in.

There’s a lot of hair that comes on that stuff and you got to identify what that is and show them how those risks can be managed. I try to condense it down at the end of the day, if I’m speaking with a comp committee or board, what’s the benefit to the bank; what’s the benefit to the executive team and then what are the risks that they’re going to need to address as they put these programs in place.

Understanding that we are going to shepherd them through this process. We’re going to work with their accounting firm. We’re going to work with their legal counsel. We’re going to help them document it all from a regulatory standpoint. Which by the way is very important, the words that I used there “help them,” document it. There’s a lot a people out there that says, “Look, we’ll do all your regulatory documentation for you.” And that’s not a good answer. The good answer is, We’ll “assist you” through that process. We’re good at it. We know what you need to have answered.

But their bank needs to have their fingerprint all over that documentation. The regulators don’t want to know that we know what you did. They want to know that the bank knows what it did. And so, it’s really critical to let them know, we’re going to shepherd them through that process and make sure it’s done in a way that they’re not going to have criticism from their examiners.

And I can tell you that one of the things when you look back at our company, we’ve operated under the endorsement of the American Bankers Association and a number of states banking associations down in – Florida, South Carolina, Virginia, Texas, Tennessee and so on and so forth, California.

But with all of that and part of the reason that we’ve able to get those endorsements is that we are extremely thorough in what we do from a documentation and expertise standpoint. And I always look back, I had a bank that I was working with and they basically said, “Why should we work with you?”

I looked at this man and I said, “I’m going to give you four numbers and I’m going to tell you here’s why you should work with me.” And I said, “Number one is 26, number two is 150, number three is 99.9 and number four is 46. And here is what those numbers mean.”

I said, “The first one is 26 and that’s the number of years I’ve worked in this industry in the region that you’re in… in the South East; 26 years I’ve worked down here. Number two is 150. That’s the number of banks that I’ve worked with. You don’t work with that number of banks and have done a shoddy job; there’s consistency there. Number three, 99.9; that’s the persistency I’ve had with the clients that I’ve had. We don’t lose clients. We don’t lose them because we’re very good at what we do and we pay attention to details. And then, the least and the last thing, the number 46. That was the number BOLI consultants that I’ve watched over my 26 years come and go out of this business.

And that’s the reality. That’s not to be a knock on anybody else. It’s just the reality that you look for people that are committed long-term, to being able to not only take care of you but that long-term track record speaks to consistency and the knowledge of the market and knowledge of the product. So that’s kind of what I communicate with our banks. Let you understand what the benefit is to you, what your risks are and what we’re going to do to walk alongside you to make sure we manage those so that you don’t have a headache on an ongoing basis.

And I think our track records speaks for itself and we engage the CPA’s. We engage the attorneys, because we know what we’re doing is valuable and we know that working with them in partnership as advisors to the bank is going to make it a seamless process. So that’s basically what I do.  

Kelly:             You guys won a few games down in Miami. I did a rough count before this interview. You won about 114 games and lost 58. You were 11 times in the playoffs, and went to the Super Bowl twice. So guys you knew how to win. How did that help you in this business?

Glenn:            One of the things that we were talking about earlier and I look back, I think why did you all win a lot down in Miami. And one of the things was that we were prepared. We were very well-prepared for the game. That speaks to our overall organization and primarily Don Shula preparing us. We were very well-prepared for the game. And then once you got past that team-wise, I had to look at it individually and I had to know what my responsibility was in the process.

But for me, I also had to know the responsibilities of others. As I talked about earlier, I had to know about the linebackers and linemen and the cornerbacks were doing and then coordinate all of that. And it’s the same process working with a bank. I’ve got to understand what the challenges are that the accounting firms have in working with their bank clients and the legal counsel; and the CFO having to do the regulatory documentation and the board, making sure they’ve asked all the right questions.

And that’s another thing, we try to ask questions for them. We want to turn over every rock so that they don’t have anything exposed. And then do what you say you’ll do. If you tell somebody you’re going to do something, then do it. And that’s the way our whole operation runs. We’re going to do what we say we’re going to do.

And if we can’t get there because sometimes glitches come up, communicate with the bank immediately, let them know the time frame. And then the last thing, and this was Coach Shula’s mantra, was you operate with integrity.

I remember for almost nine years in a row and we were the least penalized team in the NFL, and we were the least penalized because Coach Shula said, “You don’t just do it. You do it right, and you do it the right way. And winning isn’t the only thing. Winning with integrity is what matters.”

And I believe that’s the same way that we’ve operated as a company and certainly in my operation down here in the Southeast. I’ve always told my kids, “You never go wrong by doing right. And that’s the way we try and operate.”

Kelly:             Glenn, what type of bank should contact you? What do you look for? Where is your sweet spot with banks? I know you’ve got a geographic focus down in Florida.

Glenn:            Kind of that southeast quadrant.. typically, that bank that’s got a regional focus and has some programs in place that either retain or reward their key executives or that they want to make sure that they’re putting BOLI assets on their balance sheet in a way that’s not going to be a headache for them on a go-forward basis.

Kelly:             I then asked Glenn, what was the dumbest thing he’s ever done in his business career, recall in Part 1 he talked about his worst play…whiffed on tight end who went in for the score. So I asked him in his business career what was the dumbest thing he’s ever done and we’re going to finish with that.

Glenn:            This was kind of stupid. I was doing a board meeting for a bank and I was doing the presentation and it was back on a projector back then because we didn’t have the equipment, the technology we have now. And I had a chair right there, I put my foot up on the chair, and I got finished with the presentation.

I walked out and there was a rest room right to the left and I needed to use the restroom so I went in the rest room. And as I was preparing to go to the rest room, I realized I didn’t have to unzip my zipper and I thought, “Oh my gosh! It must have been down during the whole board presentation.”

And so, the head of the comp. committee came out, which was a lady, a very nice lady, very pleasant, and she said, “Great job on everything! You answered our questions, blah-blah-blah, and I said, “Nancy, can I ask you a question? Was my zipper down during that presentation?” She said, “The whole embarrassing moment,” but we still got the deal done.

Kelly:             Very good job! Well that is terrific! I think with that, we’ll sign off. Glenn, I want to thank you again for your time and I look forward to talking to you again.

Glenn:            It is my pleasure. Thank you.

Kelly:             Okay. Great.

Voiceover:     We want to thank you for listening to the syndicated audio program, BankBosun.com The audio content is produced and syndicated by Seth Greene, Market Domination, with the help of Kevin Boyle.

Video content is produced by The Guildmaster Studio, Keenan Bobson Boyle. The voice introduction is me, Karim Kronfli. The program is hosted by Kelly Coughlin.

If you like this program, please tell us. If you don’t, please tell us how we can improve it. And now, some disclaimers.

Kelly is licensed with the Minnesota State Board of Accountancy as a Certified Public Accountant.  The views expressed here are solely those of Kelly Coughlin and his guests in their private capacity and do not in any way represent the views of any other agent, principal, employer, employee, vendor or supplier.