Krista Flynn joined Chemical Bank in July as regional president for West Michigan, leading a market that includes Grand Rapids and Holland. She previously spent seven years in corporate banking at PNC Bank and 15 years at JPMorgan before going to work at Chemical, the largest bank based in Michigan. Chemical Bank, with more than $20.9 billion in total assets, has been building its commercial banking and wealth management staff, and is presently building out a new regional headquarters in downtown Grand Rapids. Parent company Chemical Financial Corp. also plans to develop a new corporate headquarters in downtown Detroit.
What’s going to drive growth for the bank in 2019?
The thing that jumps off the page at me is our strong talent attraction. We have just done a phenomenal job in the last 12 to 15 months of attracting really strong talent. The team that we’re building right now is really going to show results over the next two to three years.
What do you see the economy doing next year and how will that affect your business?
I think there’s going to be continued growth, just at a slower pace. There’s certainly more uncertainty, probably some volatility and mixed results in different sectors, but I still think the fundamentals are good. We’re starting to see a little bit of an impact from the tariffs. I don’t know what that means long term, but I do see it causing a little bit of concern for our clients that are holding back a little bit.
Holding back how?
They’re just a little bit uncertain. They’re not willing to invest quite as much. They have the money to invest and the rates are still good, but they’re worried. ‘Do we go all in right now? Or are the tariffs going to impact my bottom line and I need to prepare for that?’
As you look at those dynamics for 2019, what advice are you offering your commercial clients?
There is, in spite of tariffs and the trade discussions, a strong opportunity to take advantage of historically low rates. I know interest rates are rising and they’ll continue to rise throughout next year, but historically, they are still at a very low level. You can take advantage of that. You can still borrow at low rates and continue to invest in your business without over-leveraging your business. Companies that can maintain a strong balance sheet will really weather any storms possibly coming.
How will rising interest rates affect businesses and your lending?
For businesses, rising rates just make people a little more nervous, and that makes them think M&A activity maybe should slow down and it will decline a little bit. I think the housing market will slow a little bit because of it. But again, people have to keep it in perspective that it’s not crazy high interest rates. A little bit of the talk about recession and ‘is the economy going to start declining’ will self-fulfill if we keep talking like that. You really have to look at the fundamentals. Right now, the fundamentals are still really good.
If Gov.-elect Whitmer were to call and ask for advice, what would you tell her?
I would just say, ‘Can we all get along?’ I really just feel that the parties have to forget if they’re Republican or Democrat and try to work together and do what’s right for Michigan. Whoever is in office, whether it’s a Republican or Democrat, we all have to live within that business environment. I don’t care what party they’re part of. I would like to see progress over stalemate. Getting some things done is more important to me than who wins.
What would you like to see the new governor and legislature work on?
Early childhood education in Michigan really needs to pick up here. This is a 20- to 30-year issue. If we can’t fix that, we’re not going to be able to have the talent pool in the future to sustain and grow Michigan.
A lot of businesses leaders now talk about the tight labor market and difficulty finding people. How does that issue play into the bank’s business?
From our clients’ standpoint, obviously, it’s an incredibly tight labor market. What we’re seeing is those that can figure out how to retain and attract talent — and there isn’t a silver bullet — have a humongous competitive advantage within their industry. It doesn’t matter what industry it is. We’re finding that from a banking industry standpoint. There’s a lot of movement lately, and you have to have a differentiating feature. What is it about your bank or your organization to say ‘I want to work there and I’m excited about it?’
Is the talent issue affecting growth projections of your clients?
Absolutely. Almost consistently, every time we go to a client meeting that’s what we hear: ‘We could grow at a faster rate than we are now if we had more talent, but we’re just tapped out on talent. We can’t. We’re kind of limited based on getting the people.’ Or they can’t produce enough. Or they can’t sell enough. They don’t have sales people out there. Whatever it may be, they just don’t have the talent to get the product or service out there, so they’re topped out on their top line.
What worries you going into next year?
From an economic standpoint, probably global worries. There’s less of an impact for us here at Chemical because we’re more of a regional bank, but the impact that global discourse can have on our economy now is so often out of our control, and you just can’t predict things anymore. It’s kind of the black swan that’s out there that you just don’t know about.
What gives you optimism?
The business environment is just still very positive. People see there could be a downturn, but if there’s a recession coming, they think it’s in 2020 and they think it’s going to be kind of mild. We can weather that. This economy can weather a mild downturn of some sort. For next year, I think it’s still growth, and for Chemical Bank we are going to take market share and grow faster than the rest of the banks, which is exciting and fun. I just don’t see a lot of negatives for next year, but it will be a little slower for the economy.
Interview conducted and condensed by Mark Sanchez.