Good banks today want to be seen as boring

In March, PNC Financial Services Group introduced TV ads and plastered signs across its branches arguing that it’s “brilliantly boring”. On an April conference call, Fifth Third Bancorp chief executive Tim Spence boasted that the lender’s results were “boring”. And on April 25, Frank Namdar, chief credit officer of Columbia Banking System, described his property loan portfolio as “really quite boring, which somebody like me loves to see”.

A year ago, as regional lenders found themselves thrust into the public spotlight, banking was anything but tedious. For an industry underpinned by trust – the belief that customers’ deposits will be safe – the rapid implosion of Silicon Valley Bank and two other large regional institutions offered a heart-stopping glimpse of a less-than-boring financial sector.

In a few frenetic days in March last year, SVB plummeted into receivership. Even as the government stepped in to guarantee all deposits at the troubled institutions beyond the normal insurance limits, investors recoiled and skittish consumers and corporations increasingly directed their business to behemoths such as Bank of America, Citigroup and JPMorgan Chase. That set off intense competition among smaller lenders, which saw margins shrink as they increased the interest rates they paid on deposits to win new customers and retain existing ones.

Now, regional banks are working to rebuild trust and explain all the ways they’re not like the high-flying companies that failed. And the industry is coalescing around a new image: stodgy, stuffy and dull. “Banking should be boring,” says Mike Mayo, a Wells Fargo & Co analyst who has covered the sector for decades. “It should be like turning on the faucet and seeing water run out.”

Bank executives and analysts have uttered the word “boring” at least a dozen times on conference calls this year, double the level of all of 2022, before the SVB meltdown. Throw in terms such as “cautious” and “conservative” and widen the lens on the tumult of last year, and you get to the most ardent embrace of the humdrum in a decade or more.

In its TV spot, for instance, PNC tells viewers it’s so pedestrian and dependable that its customers do not need to be. In a crisis, “banks that are boring and do their basic job tend to leapfrog the banks that are trying to be heroic in an industry that doesn’t need heroes”, says CEO William Demchak.

Standout to failure

In recent years, SVB had stood out as a thrilling growth machine. Its client list brimmed with ambitious start-ups rolling in venture capital cash, providing it with a vast pool of deposits. SVB lent that money out to others or invested it in securities that were considered safe. But VCs pulled back in 2022, spurring start-ups to drain their balances just as inflation was taking off.