How U.S. Bank Weathers the Crisis

A few banks, however, appear well-equipped to weather the crisis, and prominent among them is U.S. Bank. The company's financials remain fundamentally sound, in large part because its home mortgage group maintained conservative lending practices when many of its competitors were trying risky strategies to cash in on the housing boom.

While other banks have struggled to stay in business in an environment of low consumer confidence and reduced consumer spending, U.S. Bank has been able to sustain trust among its current and potential customers. It was one of two banks able to increase its loans in the fourth quarter of last year; moreover, new deposits flooded in during that time as customers turned to a bank they viewed as secure. Those perceptions weren't unfounded: in February, Global Finance magazine named U.S. 

Bank as one of the world's 50 safest banks, based on total assets and long-term credit ratings.
"Our future is very bright," says Dan Arrigoni, president of U.S. Bank Home Mortgage. "With all the turmoil, there has been much consolidation and a thinning of competitors. We've benefitted from our reputation for quality, and our volume is projected to increase significantly."

Taking care of business

Much of the philosophy that has allowed U.S. Bank to avoid the worst effects of the subprime lending fiasco can be summed up in two words: relationships and discipline. More specifically, the bank's loan officers are good at building lasting relationships with customers and disciplined enough to avoid advocating loans that carry too much long-term risk.

It was the importance of those two characteristics that led the company to establish a partnership with Gallup in 2004. Marla Mayne, U.S. Bank's senior vice president for national retail lending, sums up the company's recruiting strategy prior to that point as "hiring based on experience, a handshake, and revenue numbers" -- an approach that lacked discipline and led to inconsistency in the productivity of new hires.

U.S. Bank sought a more scientific approach that included assessing its best performers and seeking candidates with similar talents. The initial partnership began with the selection of loan officers, followed soon after by selection of sales managers and regional managers.