Making His Mark

Exciting opportunities set Community Bankers Council Chairman Howard Jaffe on an unexpected course as a hometown bank leader.

By Kerry O’Leary

“Hi, nice to meet you. I don’t want this job.”

That was the greeting Howard Jaffe extended to an executive of First National Bank of Highland Park, Ill., on a Saturday morning in 1974. It was during an interview he scheduled, as a favor to his mother, for an auditor position that he reluctantly took. He was 21 and in his final semester at Northern Illinois University, and, having held a part-time position at a thrift since high school, he knew he wanted a career in banking.

His sights were set on a large bank in downtown Chicago, however—an institution that he refers to as “the best bank in the country at the time.” He had already landed a coveted position there, and he was less than enthusiastic about the smaller bank in his hometown—the bank where he would ultimately launch his career.

He agreed to return to First National on Monday to speak with the owner, Harrison Steans. The meeting between Jaffe and Steans could be loosely described as a second interview, but more accurately, it was the conversation of a lifetime.

“It turned out to be a very meaningful day for me,” Jaffe recalls. Still convinced he would only go to work for a big-city bank within the bounds of Chicago proper, Jaffe listened as Steans—who had been an assistant to Tom Watson, the legendary first chief executive of IBM—talked about his management perspective and the value of coming to work for a smaller institution.

“He promised me the chance to make a mark much greater than that with a larger establishment,” says Jaffe. “Harrison had this vision of building an empire of small banks,” he continues. “He had a perspective of teamwork, and that two heads are better than one. He instilled in his bank a culture of doing things with a high degree of ethics and values, and working together for a common cause. And he actually challenged me.”

“It was the best thing I’ve ever done,” he continues, “other than marrying that girl I met on move-in day of my freshman year of college.” He and his wife, Beverly, who have been married for 41 years, have two daughters, Victoria and Katharine, as well as three grandsons. (They also have a six-year-old Australian cattle dog.)

Relationships and relevance
Sixteen years, six acquisitions, four job roles and one sale later, Jaffe embodies the entrepreneurial spirit that came with being able to participate in the equity of something on day one—a rare experience so early in one’s career. He saw First National’s eventual sale, as well as his many lessons learned, as stepping stones on the path to buying his own bank. After the sale, he took a CFO position with a small bank in Chicago that was starting the process of going public. It was a position that allowed him to follow his inclination for leadership. Ultimately, the opportunity at Inland Bancorp in Oak Brook, Ill.—where Jaffe is currently president and COO—came up.

“Inland is a cool company,” he says. “It’s private and closely held by four individuals who came together as business partners 50 years ago and formed a commercial real estate company.” Its objective: go beyond a handshake to become “the familiar face.”

Jaffe infuses that concept into the workplace culture at Inland. The bank received a 2015 ABA Community Commitment Award for its Purple Roads program, which allows bank employees to volunteer with the American Cancer Society, giving them paid time off and mileage reimbursement to drive cancer patients to and from treatment appointments.

Inland has stuck to a model of “trying to deliver really good customer service in a way that can be tailored to what the customer needs, wants and expects—and doing it well in a vastly changing operating environment,” Jaffe says. And that concept—relevance—is one he emphasizes to fellow community bankers each time he has the floor, opportunities that are coming his way in even greater numbers as the 2016-17 chairman of ABA’s Community Bankers Council.

When asked if there is a single piece to solve the relevance puzzle, Jaffe says without hesitation the answer is “relationships.” Community banks, he explains, have an inherent ability to be the friendly face customers from all corners of the market are still looking for. “People want relationships with their bankers. They want to be able to talk with them and become business partners with them and share their financial goals. And community banks have always been able to identify and own that niche characteristic.”

Jaffe’s community is, and always has been, Chicago.

“I grew up in Chicago, I’m a native of Chicago and I’ve never left Chicagoland,” he says. Yet, keeping in tune with the local identity in the country’s third largest metropolitan area—which encompasses eight counties surrounding Chicago comprising nearly 200 uniquely defined suburbs—in an industry that thrives on personal relationships is no small task. Jaffe understands the idiosyncrasies behind the relationship model of all community banks, even while operating within the metropolis that outranks many of his peers in terms of population, competition and portfolio makeup.

Today’s community banks can’t sustain themselves with a status-quo mindset, Jaffe insists. Things have changed. The number of bank charters alone has dropped fourfold since he set foot in First National four decades ago. And Jaffe is certain that today’s 6,000 banks will be whittled down to half that again within a decade. “Just inertia itself will be able to do it,” he speculates. “The industry is always changing and we have to be mindful of that all the time.”

As the numbers diminish, the competition intensifies. The $1.1 billion-asset Inland has some 250 rival banks within a 75-minute drive of the bank’s headquarters in Oak Brook. That competition drives Jaffe’s business philosophy: “Do what you do really well, and recognize that you can’t be everything.” The logic behind this bit of wisdom is arguably what got Jaffe into banking in the first place, an anecdote he is not shy about.

‘I went to work’
“I was not a very good high school student,” Jaffe admits. “I had no idea what I wanted to do at all, and my academic performance my first two years of high school clearly showed that.” He was a junior in high school at the time—Jaffe’s newly assigned guidance counselor suggested he take an accounting class. “Accounting is as black and white and 180 degrees as you can get. And I just got it,” Jaffe recalls. When it came time to choose a work-study position, he chose Deerfield Savings and Loan, located not a mile from the school.

“And all that time, while working during high school, I wanted to be a banker,” he recalls. “I went back and worked at the thrift for three years. Summers, holidays, I never went to Florida on spring break—I went to work.” He never stopped.

And Jaffe recognizes that change will never stop. “I think banking in a broad sense will continue to evolve and change at a very brisk pace, and finding ways to keep doing what we do, but to keep doing it better, will be imperative.” Despite the many “headwinds” community banks face—overregulation, competition, consolidation—he’s optimistic. “It’s very plain and simple, my goal as chairman of the CBC is that community banks remain relevant and vital in serving their constituencies.”

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About Kerry O'Leary

Kerry O'Leary
Kerry O'Leary is a senior writer at the ABA Banking Journal.