Greg Braca conjures up the images of Commerce Bank’s entry into the metro New York market quite easily. “Those were interesting times … back in 2002 we had no stores, no lenders, no bankers and no offices. We were hiring people in the back of diners and we built a bank in the greater New York area. It was an awfully exciting thing to be a part of — to build a full-service bank literally from scratch. And it’s equally gratifying to look around and see much of the senior management team we assembled back then is still around, running many of the businesses here for TD.”
For a dyed-in-the-wool New Yorker, this was a period of professional fulfillment, and he politely sets aside the opportunity to discuss his pre-Commerce Bank days as no longer relevant. Instead, he moves on and asserts the groundwork undertaken back then proved to be well conceived. “We built a large franchise and assembled what I consider to be one of the best banking teams in the market,” he adds. Yet Braca is quick to point out that the biggest accomplishment occurred when Commerce Bank was acquired by TD Bank Group. “Back then,” Braca recalls, “the stars aligned. This entity north of the border that didn’t have a tremendous presence in the U.S. really seemed to understand Commerce’s culture and service model. Those conversations that were started in 2007 proved to be timely. After all, who knew that a year later the world was going to blow up and we would wind up partnering with one of the strongest banks on the planet?”
Today, Braca heads the U.S. Corporate and Specialty Banking offerings at TD Bank replacing industry veteran Walter Owens, who departed the post earlier in the year. His world includes six distinct business lines: corporate banking, commercial real estate, healthcare lending, equipment leasing and finance, commercial dealer services and asset-based lending.
Although his tenure in the position has been brief, he readily shares his views for Corporate and Specialty Banking. “Obviously I’m familiar with many of the businesses, but I have a vision of what Corporate and Specialty mean given the TD brand. First and foremost, we’ll continue to run these businesses to be accretive to the brand and not some siloed-off wholesale bank out on its own somewhere in the organization. I think many of the larger banks have missed the mark with their vast distribution channels in which no one is really working together from the client’s standpoint. What customers really want is a bank and a banker to handle all of their needs … one day it might be a $50 million revolver for their business and the next day, it’s their kid’s car loan. They really aren’t interested in the working silos of how an institution organizes itself internally.”
In contrast, Braca sits proudly with regard to the way the teams throughout the bank have handled the merging of the TD and Commerce cultures. He notes, “Many times when banks merge cultures, they never really get it quite right. You wind up with a lot of conversations that go ‘yeah, but this was legacy this’ or ‘this was legacy that.’ Our two organizations really came together under the TD shield. Six or seven years ago, TD had no presence outside of a small securities business in the U.S. Today we have 1,300 stores from Maine to Florida and we have an almost $200 billion bank fully up and running that’s accretive to the overall business of the parent company; we’re positioned quite fabulously to take some market share in the coming years.
“Oh, and by the way, when other banks were licking their wounds from the fallout, we continued to grow and provide commercial and corporate loans, we continued to expand … and that’s a really terrific accomplishment in the face of all of the nonsense going on in the market. So we feel really good about all of this. It’s full speed ahead.”
At Braca’s side is Joe Nemia, who for the last year has led TD Bank’s Asset-Based Lending group. The second-generation asset-based lender, who began his career as a field examiner at The Chase Manhattan Bank and has since led the ABL teams at GE Capital and CIT, joined TD based on the same strengths that Braca articulates. Nemia says, “There were three reasons I joined TD. One was the strength of its balance sheet. Through my professional experience, I’ve grown to understand the importance of having liquidity. Secondly, I saw that the bank has a firm commitment to grow the ABL platform within the Corporate and Specialty Banking segment and three, there was the opportunity to expand TD’s ABL market share within a very large market.”
He continues, “Add to that, TD enjoys competitive advantages that begin with an experienced team of asset-based lending professionals and a business that is supported by our parent company’s triple-A credit rating. When all is said and done, we have the ability to offer the entire banking suite of products seamlessly to our customers. And that’s a unique advantage given the size of our organization.”
Of course, neither Braca nor Nemia intend to rest on these laurels. As a means to bring greater value to clients and in turn build upon these advantages, Braca intends to bring what he calls greater granularity to the businesses. He explains, “Banks tend to whitewash the wholesale bank as one entity, one business. We are going to bring more granularity by having a very distinct asset-based lending business, a distinct corporate banking business and so forth. So we’re going to have some distinct conversations about the future of these businesses that reside within the commercial or corporate bank.”
So, what’s the plan? Nemia explains, “As far as leveraging on these initiatives Greg has mentioned, and to use an analogy, we’ll set ourselves up to go a mile deep and an inch wide as opposed to going a mile wide and an inch deep. That means we’re going to focus on distinct industry segments, and we’ll deliver a team that has a core competency in the products and in industries. In the end, we want to be considered thought leaders and provide more than just a commodity to our customers.”
Braca adds, “What you can expect to see from TD is a refined approach around our healthcare space, specifically with our acute care/long-term care, not just a shotgun approach to everything healthcare. Elsewhere in the corporate bank, we’re going to do more around the utilities and energy space. And we want to do more around retail in the ABL space. When you think about verticals, that’s the place where you can start building real capabilities … that’s where you can really add value.”
As for the realities of doing business in today’s climate, both Braca and Nemia concede that heightened regulatory oversight is front and center these days. Yet Braca, who proves himself to be a pragmatist in such matters, notes, “We have a distinct view of our risk and a distinct view of how we manage it. We take risks we understand and if you are really up to running a well-run bank that’s positioned not only for global growth, but to take advantage of the opportunities as they come, you really need to understand the environment that you’re in. Certainly there are challenges with understanding components of the various provisions of Dodd-Frank, but all of that is table stakes. You need to understand and embrace them. And quite frankly, if you can organize yourself where these things become business as usual, you can set yourself up to be a differentiator in the marketplace while others are trying to adapt to the changes. At TD, we’ve put a heavy shoulder to them, and I think we’re out in front of them.”
Nemia adds, “Fundamentally, we view the compliance within the regulatory environment as a license to operate in the markets we serve. Sure, we have to toss things around and talk about the changes but more importantly, we talk about how we can use it to our competitive advantage. This really serves to validate the fact to our shareholders and customers that not only do we have a financially sound enterprise, but we’ve bumped up our commitment to operational excellence.”
Again, the pragmatist in Braca emphasizes, “It’s all about building a business where regulatory requirements are business as usual so we can move on and go about growing the business of the bank.” It comes with little surprise that Nemia concurs with that perspective. He closes with the following message: “I want folks to know that we’re open for business, and we look forward to continuing to work with our customers as well as with other ABLs on syndicated transactions … and of course, those lenders working with us as we serve as arranger in an ABL deal.”
Stuart P. Papavassiliou is senior editor of ABF Journal.