Click upper-right corner of infographic for download and print options.
See also February 2024 Timyan Bank Alert post Unionized Banking in the US.
Showing posts with label AMAL. Show all posts
Showing posts with label AMAL. Show all posts
Unionized Banking in the USA
Those of you who follow Timyan Bank Alert closely know that I'm on a tear about unionized banks in the US.
Evaluating Amalgamated and AmeriServ's respective performance in the context of unionized banking has me seeing the recent Wells Fargo branch unionization in an entirely new light.
Disclosure: As of this posting, I own shares in ASRV, CNAF, and WFC, and may subsequently either dispose of them or purchase more.
A Brief History
| There have been three waves of bank unionization in the US. Interest in organizing in the industry appears to surge every 50 years. 1st Wave (1920s) At least 50 of our nation's oldest banks were unionized from the start. Of these, only three remain, but all can be said to be performing well.
2nd Wave (1970s) Three banks were unionized during the second wave. None are exemplary performers.
3rd Wave (2020s) Two recent labor organization successes suggest we are in the third wave of bank unionization. So far, Beneficial Bank has performed poorly since unionizing in 2020. How the Wells Fargo branch unionized in 2023 will perform remains to be seen. Is a third predictable, based on prior waves?
See also: Infographic: Unionized Banks in the US |
Takeaways
| There's a case to be made for increasing Union Ownership in US banks. Generally speaking, unionized banks that were both founded by unions and maintained significant Union ownership have performed much better than their peers. Four of the aforementioned unionized banks boast Union Ownership — the old-schoolers, plus 70's newcomer Union Bank and Trust:
The average ROA and ROE for these four banks are 1.2% and 18.3%, respectively, vs 0.4% and 6.0% for the two publicly traded peers that don't feature notable Union ownership (i.e., CNA Financial and AmeriServ). It's not surprising today's bank tellers are expressing interest in organized labor. Frankly, many tellers are being financially exploited — and at the expense of taxpayers. The US Bureau of Labor and Statistics indicates as much as 35% of America's bank tellers are making less than $15/hour. According to a recent Axios article about labor organization efforts at Wells Fargo, as many as one in three bank tellers relies on some form of government assistance.” Bank profits are high enough that banks can afford to pay their workers a living wage, and societally, we should be expecting, encouraging, and if needed, requiring, them to do so. There's no need and no excuse for US banking to be operating as a government-subsidized industry. There's a case to be made for encouraging Teller Ownership in our banks. Financial stewardship and fiduciary thinking are mindsets crucial to the DNA of a strong banking system. A bank that doesn't care about the financial well-being of all its stakeholders isn't a world class bank. There's literally no bank in the nation that can't afford to gift some shares to every employee, getting them truly vested in the bank's performance. |
Sources
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Amalgamated Financial Corp, New York, NY (AMAL)
Unionized Banking at its Best
Posting the January 2024 Timyan Bank Alert™ Review of AmeriServ Financial got me looking into unionized banks as a class.
The Big Aha for me? There's both room and reason for Unionized Banking in America, and it can be done well.
Unionized banks are a rarity in the US –– it takes a special banker to even know what to do with them, and those bankers are even more rare than the banks in this niche.
Although there were 50 or so before the Great Depression, only six of 4,458 community banks left in the US today are unionized. Among them, Amalgamated is the top performer, and it owes its success to the good fortune of having been led by a non-traditional banker — Keith Mestrich.
Were AmeriServ or any other of the country’s unionized banks to engage Mestrich in any capacity, I would Follow The Leader and seriously consider buying shares in that entity.
Disclosure: As of this posting, I do not own any shares of AMAL.
Prospective Buyers | As attractive as the Amalgamated franchise is from a fundamentals standpoint, I don't see any acquisitive bankers in the area who'd be open to moving into unionized banking. | ||||||||||||||||
Financial Snapshot †as of 12/31/2023 |
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Luminaries | Keith Mestrich, Former CEO Lynne P. Fox, Chair Priscilla Sims Brown, President and CEO | ||||||||||||||||
Gold Stars | Most of the Gold Stars that apply to Amalgamated now are attributable to Keith Mestrich, whom the bank hired in 2012. (Amalgamated had lost money in 4 of the prior 5 years.) Despite being a “newbie” in the field, Mestrich managed the fundamentals of “normal” banking expertly, by:
Mestrich even grew Amalgamated's value via effective acquisition by:
Even more impressive to me are the ways Mestrich brought unique value to the Amalgamated franchise and community by:
In my perfect world, Amalgamated would scale the Mestrich game! Roll up some other unionized banks, bring Amalgamated's innovative products and superior service to their uniquely shared markets, and ring out their inefficiencies. | ||||||||||||||||
Sources |
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UPDATE: AmeriServ Financial, Johnstown, PA (ASRV)
On the 10-year anniversary of my January 2014 Timyan Bank Alert™ Review of AmeriServ Financial, I'm disheartened to report that this bank is being run into the ground by a bunch of bumbling money grubbers.
ASRV is still flying under the radar in terms of coverage it gets from industry analysts and reporters, and I would still very much like to see it get on the radar, albeit for different — and less friendly — reasons.
My sincerest apologies to readers of my original post and/or 2017 Updated Review of AmeriServ. My only consolation is this: if you meet SEC Rule §240.14a-8 criteria, you could try submitting a Shareholder Proposal to change the bank's bylaws to make it easier to nominate a more independent slate of directors.
Per AmeriServ's April 2023 Proxy, the window for submitting shareholder proposals is between January 27 and Feburary 26, 2024.
Disclosure: As of this posting, I own shares of ASRV and may subsequently either dispose of them or purchase more.
Prospective Buyers
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AmeriServ has a unionized workforce, which likely acts as a poison pill for potential acquirers. The only acquisitive bank I can imagine might not be put off by this is Amalgamated Bank, which is also unionized.
Amalgamated Financial Corp, New York, NY (AMAL)
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Financial Snapshot
†as of 09/30/2023 |
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Scoundrels
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Jerome Michael Adams, Jr, Chairman
Jeffrey A. Stopko, President, CEO, and Head of Investor Relations
Allan R. Dennison, Former Chairman and CEO | ||||||||||||||||
Red Flags
| The red flags about AmeriServ and ASRV are too many, for too long, to enumerate succinctly, but here are a few summative and recent highlights.
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Sources
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