Corporate restructurings are never easy, but it helps if you can land a new job at a much larger firm, with presumably, a much fatter salary.
For Rick Hartnack, the move from Union Bank of California, where he was one of three vice chairmen, to U.S. Bancorp was one that made perfect sense.
Hartnack, 59, began work last week at Minneapolis-based U.S. Bancorp to head up its consumer banking division. The job entails overseeing the bank’s retail branch network of 370 branches in 24 states, including 35 offices in San Diego County.
It also encompasses managing the bank’s home mortgage, consumer lending and finance, in-store and corporate on-site banking, business equipment finance, small-business banking, workplace and student banking, corporate marketing, and investments and insurance units.
Instead of managing some 4,300 employees, as he did before, Hartnack is now in charge of about 25,000 workers.
While all this sounds wonderful, there is likely another motivation to Hartnack’s decision. He left right after Union named Philip Flynn as its first chief operating officer. Hartnack and Flynn were essentially the bank’s two top co-managers, with Flynn heading up Union’s wholesale and commercial lending side, and Hartnack managing its retail and investment side.
Asked if Flynn’s promotion had anything to do with leaving Union, Hartnack said, “It’s not important to the conversation.”
Asked if he applied for the COO’s job that was given to Flynn, he said, “I don’t want to get into it.”
Hartnack preferred to put a positive spin on his “retiring” from Union, saying he knew both USB’s current chairman and chief executive officer, Jerry Grundhofer, and President Richard Davis for many years, and wanted the chance to manage a big, multi-state operation.
Hartnack worked at Union for nearly 14 years and put in 34 years in banking, including stints at First Chicago Corp. and First Interstate Bank of Oregon. The former Marine captain also held board positions with MasterCard Inc. and the 12th District Federal Reserve Bank.
Union Bank spokeswoman Joann Curren said Union Bank decided to establish its first COO as a function of a planned streamlining, which would provide more opportunities for cross-selling and cross-promotion. She declined comment on why Hartnack decided to leave directly after the reorganization was announced.
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U.S. Bank Honors Longtime Employees:
Hartnack is going to a bank that apparently appreciates loyalty. Last week, the bank announced it was recognizing nearly 24,000 employees who have been with the company for more than five years during a Service Recognition Week. As part of the celebration, the bank gave special mention to seven workers who have been with the company for more than 50 years.
U.S. Bancorp is the sixth largest financial holding company in the nation with total assets of $195 billion.
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SBA Study On Bank Lending:
The continued merging of large bank holding companies generally results in fewer loans to small businesses, according to a recent study done by the Office of Advocacy of the U.S. Small Business Administration.
The study that looked at annual data from 1997 to 2002 concentrated on the 50 largest bank holding companies and excluded small banks and credit card banks.
Among the key highlights of the report are:
– Larger bank holding companies tend to do less small-business lending as a percentage of total business loans.
– When large holding companies acquire banks and allow them to operate as subsidiaries rather than merging their operations, small-business lending isn’t greatly affected.
The Office of Advocacy acts as the “small-business watchdog” of the government, advancing views and concerns of small business inside the federal government. Chief Counsel for Advocacy Thomas Sullivan was appointed by the president and confirmed by the Senate.
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WIB Offers New Workers’ Comp Program:
The Western Independent Bankers Association, representing about 300 small community banks, are offering a new self-insurance workers’ compensation program that it says will save most banks about 20 percent on these costs.
The program was recently approved for banks by the Federal Reserve’s Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp., as well as the California Department of Industrial Relations.
Compensation Risk Managers, based in Poughkeepsie, N.Y., is the program’s contracted administrator and underwriter. CRM offers group self-funded workers’ comp programs for most industry sectors through 12 other separate programs in California and New York.
WIB membership comes from 12 Western states and several territories.
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ABA Proposes Deregulation:
The American Bankers Association joined a growing chorus of opposition to provisions in Sarbanes-Oxley accounting reform law that require extensive reporting and testing of public companies’ internal control systems.
In a letter to Securities and Exchange Commission Chairman William Donaldson, the trade group said the requirement is causing banks’external auditors to re-create “70 percent or more of the work of the internal auditor.”
In the letter, the ABA cited as an example the excessive auditing costs a community bank in the Mid-Atlantic region — which saw its auditing costs more than triple last year from $193,000 to $600,000, primarily from increased compliance costs related to Sarbanes-Oxley.
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Small Change:
Southwest Community Bancorp declared a 5 percent stock dividend payable May 18.
Send any finance news to Mike Allen at mallen@sdbj.com. He can be reached at (858) 277-6359.
