The art of banking
Banks are Don Coffin’s studio
KENT DARR Oct 28, 2016 | 11:00 am
15 min read time
3,455 wordsBanking and Finance, Business Record InsiderDon Coffin had a key role in a piece of Greater Des Moines banking history back on March 1, the day he arrived at the office as president of Bankers Trust Co.
The bank, rapidly approaching its 100th year, for the first time had found its president from within the ranks. Coffin’s appointment to the role was part of succession planning that will lead to CEO Suku Radia’s retirement the first week of 2018.
The promotion might come as little surprise to anyone who witnessed Radia’s enthusiasm when he hired Coffin as senior vice president and chief lending officer in October 2008. Radia was super enthusiastic, pointing out Coffin’s strong credentials, years of experience and calm demeanor.
At the time, Coffin’s direct experience in the banking business trumped Radia’s by a couple of decades. Radia had come to Bankers Trust in 2008 from Meredith Corp., where he was chief financial officer. Before that he had been a managing director at KPMG LLP. Among his clients at KPMG were the Ruan family and their businesses, including Bankers Trust.
In 2008, Coffin was given free reign to deal with the bank’s problem loans and build its loan portfolio. Steve Zumbach, a lawyer for the Ruan family for more than 30 years, first met Coffin 20 years ago while working out financial issues a local business had with a different lender. He said Coffin has a brilliant and analytic mind, as well as quiet confidence that “takes the tension out of a room.”
Coffin is “unflappable,” Radia said.
“Post Great Recession, we never put anyone out of business,” he said. “Instead we worked with them. Don deserves credit for this.”
The Ruan family and Bankers Trust also supported Radia’s choice of Coffin as the bank’s next president.
“I think the Ruans got it right,” Zumbach said. “He is not the clone of Suku Radia, but they have 95 percent of the same genetics in terms of how they function.”
Coffin has turned plenty of heads in Greater Des Moines banking and lending circles.
His promotion to president coincided with a time of steady growth at Bankers Trust. It is the largest independently owned bank in the state, with a goal to reach $5 billion in assets by 2020.
In Coffin’s metaphor for growth, the $5 billion is simply a sign that the bank is eating its vegetables, getting plenty of exercise and doing all of the right things.
As chief lending officer, Coffin has overseen a near doubling of Bankers Trust’s loan portfolio, from $1.6 billion at the end of 2008 to $2.9 billion at the end of 2015. He came to Bankers Trust with a reputation for having extraordinary skills as a banker and lender. Radia gave him a free hand to manage and build the loan portfolio during the Great Recession and through what has been an abnormally long recovery.
“He is a banker’s banker,” said Gerry Neugent, president and CEO of Knapp Properties Inc. Simple enough, and a phrase that is repeated by people who have worked with Coffin over a career that reaches to his college days, when he was considering a degree in mathematics at the University of Northern Iowa.
A banker by accident
Coffin said he got into the banking business by accident after responding to a job posting on the door to the financial aid office at UNI in 1979. National Bank of Waterloo needed a night teller.
“I was good in math, so in theory I was majoring in math for a little bit,” he said. “Through this job I realized there were other pathways in the financial world, and it seemed interesting to me. I didn’t want to teach math.”
He went through a formalized training program and learned the nuts and bolts of the business. Math and analytics were a key component of credit, and they were areas where he excelled.
“It got me to a point that allowed me to do a deal for a customer, and that’s what got me to where I am today,” Coffin said.
Like many lending specialists, Coffin was drawn to the business owners and how they made decisions.
“I think part of it is the entrepreneurial aspect of it, meeting those types of folks,” he said. “But really it’s making the deal work, whether it’s them buying a company or buying a piece of property or buying a piece of equipment, being able to help them through whatever the challenges are they are having.”
Coffin arrived in Des Moines in 1991 as a credit manager at the former Hawkeye Bank. He ultimately was in charge of the loan department. Suku Radia saw Coffin’s name in the newspaper and sent him a note, as he has done with countless other people who catch his attention.
“I didn’t know who this guy was,” Coffin said. “I just remembered the note, and he was in the bank one time and he looked me up or I looked him up and we just started a conversation. I think he is telling the same jokes now that he was telling them.”
Coffin is said to have a strong sense of humor, but he doesn’t believe it is up to Radia’s standards.
In the early 1990s, Coffin met Greater Des Moines banker Kim Butler. They were dropping their children off at school. At the time, Coffin was still with Hawkeye Bank and Butler was with what was then Norwest. They became family friends and banking associates. Coffin eventually offered Butler a job at Hawkeye Bank. They later worked at LaSalle Bank in Des Moines, and in 2008 they opened the Greater Des Moines office of commercial lender The PrivateBank, where Butler is the managing director.
“One thing that I will say about Don, and it continues to be true, if he knows there is somebody who has some talent, he will make room for them. He is quick to give credit where credit is due,” Butler said.
When The PrivateBank opened, Coffin was named head of the office.
“When I would take a loan to Don, he would ask, ‘Well, what do you want to do?’ I actually had some authority to go along with my responsibility,” Butler said. “He empowers his people because he entrusts them to make the right decision.”
Coffin and Radia have been a good fit for Bankers Trust, which has become a strategic partner with The PrivateBank, Butler said.
“Suku’s skills are in the community and identifying opportunities and allowing Don and his folks to put them together,” she said.
Coffin is a wise and empathetic lender, she said.
“He can cut through a lot of the noise and understand a lot of the risk,” Butler said. “He can do deals that other people wouldn’t completely understand and also protect the bank. … He has a very kind heart.”
Coffin said much of that empathy came from getting into the banking business during the farm crisis. (See “A lesson from the farm crisis”)
And yes, he does have a sense of humor. He was especially adept at commemorating embarrassing moments, such as when a co-worker drove off from a gasoline pump with the nozzle attached to her car.
“He gave her a gasoline nozzle for Christmas,” Butler said.
“Right person for the right time”
Zumbach met Coffin more than 20 years ago.
“He was a very young lender; I was impressed with the maturity of a 35-year-old. He had been through the war,” Zumbach said. The war the farm crisis.
At the time, Coffin was attempting to work out a troubled loan involving a family business.
“If he didn’t figure it out, they were going to lose everything,” Zumbach said. “He did a remarkable job. There was a passage of time, and ultimately the company was sold for a lot of money.”
Zumbach came to admire the banker.
“His best quality is quiet confidence. He has a very disarming personality. He’s soft-spoken, but don’t be confused — he is a determined and tough negotiator, but he takes the tension out of the room. When you’re in a crisis, that calm, thoughtful demeanor serves clients and customers as well,” Zumbach said.
These days, with the economy in a period of sustained growth, that quiet confidence comes in handy.
“When you go through a period like that, of success and growth, there’s a tendency to become overly confident and you make mistakes. I think it’s the hardest time to be a good banker, because it is less clear. That is where Don Coffin is right now; it is less clear what are the good loans and the bad loans,” Zumbach said.
Coffin is up to the task. If the economy experiences a significant downturn, which is certain to happen at some point during Coffin’s career, he has the ability to guide the bank.
“He has a brilliant mind. He’s good technically, with strong analytics. He’s the right person for this type of economic times. It’s almost certain that during his tenure, there will be a significant economic downturn. We hope there is not, but someone who is very disciplined will serve the bank well in underwriting new loans and renewing old loans. He has very strong lending skills,” Zumbach said.
Zumbach pointed out a key similarity between Coffin and Radia.
“Great community bankers and great lenders build economies. It’s an art, and you don’t learn it in MBA school,” he said.
Bio and background: Don Coffin, president, Bankers Trust Co.
Age: 56
Hometown: Waterloo, now lives in West Des Moines
Education: Bachelor’s degree in financial management from the University of Northern Iowa
Family: Wife Mary; son Chris, a graduate of Loyola University and the Art Institute of Chicago living in Chicago; daughter Caeli, attending Iowa State University; son Cole, who is in high school.
Banking credentials: Served as managing director of national commercial banking with The PrivateBank and Trust Co., based in Chicago, and helped open its Des Moines office. Before that, Coffin was senior vice president and region head for the central division of LaSalle National Bank, where he managed the Iowa, Colorado and Nebraska offices. He arrived in Greater Des Moines in 1991 as executive vice president of Mercantile Bank of Iowa, now US Bank, where he was primarily responsible for the bank’s loan portfolio.
Bankers Trust: Hired as senior vice president and chief lending officer in October 2008; promoted to executive vice president and chief lending officer in 2013; named president in March.
Community involvement: Easter Seals of Iowa, president of the foundation board and a member of the national board of directors. Member of the supporting local industry committee of the Greater Des Moines Partnership and a board member of Iowa Bankers Mortgage Corp., Blank Children’s Hospital and Iowa Business Growth. Member of the United Way Workplace Campaign Cabinet and Campaign Cabinet Committee. Assists fundraising for the 2017 Solheim Cup, Tocqueville Society, Water Works Park Foundation and the Boys & Girls Club of Central Iowa. He is a longtime member of the Rotary Club of Des Moines A.M. and is active in his church. In June 2011, Coffin received the the Individual Governor’s Volunteer award for his 20 years of service to Easter Seals Iowa and Camp Sunnyside, and he received the organization’s first annual Bob and Billie Ray Board Leadership Award.
A lesson from the farm crisis
“My impression of banking and bankers was definitely influenced my first year in the industry. I was just out of school, and part of my training, on occasion, was clerking auctions during the farm crisis. I remember at first thinking, ‘They didn’t pay, so the bank needs to take action.’ However, when you see the people who are being foreclosed upon, it affects you differently. It is a tough time for both the customers and their bankers, as neither wants to be in that position.
“Now I enter deals a lot more directly, making sure people know the risks and understand what could happen. If times get tough, I know I am much more patient with the credit and feel as though we are in a partnership to both figure out a solution. Many times this strategy has paid off. However, I also know we are in a risk business and it always doesn’t work out. Thankfully these times have been rare. Even then, sometimes years later, people appreciate the effort.”
A few questions for Coffin: Radia’s ‘oldest intern’
What have you done in preparation for Suku Radia’s retirement?
Some would say I’ve been preparing for this opportunity some 30 years, given my experience in the banking industry, but I would say the most significant preparation has come in the recent eight years I’ve served the Ruan family, its board and worked alongside Suku Radia. I have been privileged to work with Suku through one of the most difficult times in the banking industry. We were able to thrive and even grow the bank every year throughout the recession and have become an even stronger bank. This was a tremendous development period for me as well. Suku will probably tell you I’m the oldest intern he has had the challenge of mentoring.
Compare and contrast your leadership style with Suku’s.
While I expect it is natural to want to compare and contrast styles, everyone knows there is only one Suku Radia. With that said, I believe we are both consensus-builders who can move a team toward a common vision, we are both inclusive, and we both like to have a little fun along the way.
We differ not in style, but in focus. Up until now, I’ve been more focused on the inside of the bank — helping to ensure our processes enhance our employees’ ability to provide top-notch products and service to our customers. On the other hand, Suku is quite a bit more outwardly focused, or visible in the community. Over the next year, you’ll see that start to shift from one person being the face of the bank to our entire talented team of leaders.
Where are the bank’s untapped markets? What opportunities do they present?
Banks are the best partners when they can serve as trusted advisers and bring value-added knowledge to the table — I call this “knowledge-based lending.” With that said, we have deep and unique knowledge in many lines of business, including commercial real estate lending, ESOP lending, lending for mergers and acquisitions or recapitalization of a company. We recognize customers are busy doing what they do best and they have a choice in banking. These types of lending involve major transactions for a company, and they want it done correctly.
Were you involved in putting together the consortium of banks that will provide the construction loan for the Iowa Events Center Hotel? If so, how difficult was it to put together that loan; what kind of protections did you put together for the bank and its customers?
Yes, I was involved, but Jennifer Cooper in our commercial real estate area was the key player in the transaction for Bankers Trust, and she did a great job shepherding the complex deal. We underwrote this deal as we would have any other. We ensure we are thoughtful of the risks involved and understand what we can and cannot do. In this particular case, we underwrote conservatively — the state of Iowa, the city of Des Moines and Polk County stepped up to make it a reality. I firmly believe we will look back on this with a great deal of appreciation for the project and the people who made it happen.
The commercial real estate market is thriving again in Greater Des Moines. Do you see any cause for concern or caution in the next year to three years?
These are exciting times for Greater Des Moines, in part because of both the commercial and housing growth. While I wouldn’t call it a concern, we are naturally cautious regarding the number of multifamily properties either planned or currently under construction. According to the Greater Des Moines Partnership, in the downtown area we currently have about 10,000 housing units and 3,600 more in the pipeline.
Parallel to, and included in, future housing plans are the new companies choosing to build in our region and needing to hire and retain employees. The question we will always ask is if as a community we are planning for and building the right types of housing options for the quality of life we want to provide for those who live and work here.
The bank is on course to reach $5 billion in total assets. Why shoot for that number?
There are two reasons for setting goals, including the $5 billion mark: our employees and our customers.
People are built to achieve. Setting goals and celebrating milestones are essential to that opportunity for employee fulfillment. In 2015 our earnings were up 12.4 percent to $37.1 million — a sixth year of record performance. We are on track for another record year and achieving the $5 billion mark by 2020. But don’t mistake these metrics as our focus. I believe that when we focus on doing the right things, the results are an outcome.
Our customers benefit from our financial strength and stability. For example, one of the variables that affects our loan underwriting is the total assets we have under management. As you would expect, the greater our assets, the greater our capacity for lending and credit, treasury services, commercial real estate financing and providing loan support to smaller banks throughout Iowa.
Tell us something that not many people in Greater Des Moines know about you.
I was born seventh in a family of 10, so I have vast experience in negotiating.
How did you and Suku meet, and did you know or believe that you would wind up working for and eventually leading Bankers Trust?
Anyone who knows Suku knows he is a prolific writer of notes and letters recognizing the achievements of others. I had been promoted in my job, and the promotion was featured in the newspaper. A note of congratulations from Suku followed shortly, and soon after we met in person — that was 26 years ago, and I kid him that he’s still telling the same jokes. It was several years before I joined Bankers Trust, but no doubt that simple kindness put a series of events in motion and led to the opportunities I now have.
When you are not at the bank, what are you doing?
If I could put together a perfect day, it would start with a round of golf (Coffin is attemtpting to lower a 7 handicap) followed by time with my wife and children, most likely at one of my children’s activities — maybe a visit to watch the UNI Panthers win a football game, followed by dinner with friends. I doubt we could pack all of that into one day, but I would love to try it.
Much of your charitable work is focused on children’s issues. Why?
While known for its wonderful children’s camp experience, Easter Seals is predominantly devoted to adult programs and services.
I believe every person should have equal opportunities to live, learn, work and play in our community, so I gravitate toward causes supporting people who have difficulty helping themselves — this often includes children and those with disabilities. For people with disabilities, and their families, this is an extraordinary challenge. That’s where Easter Seals Iowa shines as it serves children and adults with disabilities and provides support for their entire family.
I have served in a variety of volunteer roles and leadership positions for approximately 25 years and still marvel at what this organization makes possible. I’m proud to share that Easter Seals is the leading nonprofit service provider for individuals with autism, intellectual and physical disabilities, and other needs — from babies just 6 weeks old to seniors — and last year served approximately 2,500 adults.
In addition to Easter Seals Iowa, I serve on the board of Blank Children’s Hospital, which has also given me yet another opportunity to support work that improves the health and well-being of children and their families. My wife, Mary, and I, alongside Steve and Cathy Lacy and BJ and Tiffany Baker, currently chair a fundraising effort for the Boys & Girls Club of Central Iowa.
Bankers Trust also has a strong commitment to volunteerism and philanthropy. Each year, our employees dedicate 14,000-plus hours of volunteer services, and we look to grow this number. Additionally, we have built a deep-rooted corporate culture of inclusiveness. For the bank’s 100-year mark, next year, we will celebrate local ownership and plan to give back to the communities that have allowed us to grow.