Marc A. Stefanski, chief executive officer, president and chairman of Cleveland-based Third Federal Savings and Loan, is marking three decades in the CEO’s chair this year, which is no small feat in the banking world.
Since becoming chairman and CEO of the savings and loan 1987, Stefanski has overseen Third Federal’s continual growth as the top home mortgage lender in Ohio, as well as its growth in the Florida market. Under Mr. Stefanski’s tenure as CEO, Third Federal has maintained and improved its delivery and service of savings and home mortgage products, including the introduction of the Internet as a delivery channel for mortgage loans, with online now serving as the largest source of loan applications for the company.
Chief Executive sat down with Stefanski to talk about his 30 years as CEO, what’s next for the savings and loan industry and why it’s so important to treat employees with respect and to always put the customer first.
Q: Talk about your company culture and why a customer-centric attitude is so important in banking.
A: We put our customers first and out strategy second. So, when we’re making decisions, it’s all based on customers and customer service first, and the strategy falls into place after that. We base our culture on a value system, and our values are love, trust, commitment to excellence, treating one another with respect and having fun.
We actually design products and services based on those values, and we also review the people that work for us—our associates—based on how they demonstrate those values with one another at the office and with customers. So we don’t have sales quotas, and no one is on commission.
Q: Why do you believe women make such great leaders in the banking space?
A: First of all, 80 percent of our associates are women, so we depend highly on women in our organization. This dates way back to 1938 when my mother and father started Third Federal. They were a team not only in marriage, but they were a team in business also. When I was growing up, my mom was not only raising five children, but she was intimately involved in the business, too. I saw that from the day I was born. Having women play an important role in business is not a novelty for me, it’s not uncomfortable, it’s very much a natural thing. In fact, out of the six direct reports that I have four are women, all in key positions at Third Federal.
“I think if you find a niche with a specific product or service, you can outperform your big bank competitors.”
Q: What does the future hold for the savings and loan industry?
A: There aren’t too many savings and loans left, most have converted to banks or bank charters and they offer a diverse product line. Our product line is very simple: We take savings from the community and lend it back out into the community in terms of single-family, owner-occupied homes. We do second mortgages, too, but our business model is extremely simple.
It’s an old-fashioned model, but it seems to be working for us, and we have now expanded to 23 states via the internet and direct mail. It’s easy to expand today without brick-and-mortar to deliver products and services throughout the country. You even have a chance to get a bad credit business business loan for a restaurant.
The Internet is going to continue to be an asset in the banking industry, in general, but cybersecurity is extremely important—that’s our number one priority, protecting our customers in that respect.
It used to be that you knew who your competitors were—they were all local, you knew where branch locations were, you knew who was on the loan committees and when they met—it was a very small, very community-based business. You don’t have that anymore. All of the banks are national or regional, and that’s our competition. We’re not small—we’re an almost $15 billion organization—but that’s small when compared to some of the huge organizations out there. So the challenge is to outperform those organizations.
Q: Thirty years as CEO in the banking world is a very long tenure. What’s your secret to success?
A: I think if you find a niche with a specific product or service, you can outperform your big bank competitors. They offer a smorgasbord of everything, but finding that competitive niche where you can outperform a superregional, national or international bank I think is key.
That’s what we’ve done at Third Federal: We have a niche in home lending and we feel that we do it better than anyone else, we price better than anyone else, we can turn over a loan faster than anyone else. You have to be able to perform better than anyone else if you’re going to be in a particular product line or service.
And, of course, hiring the right people and treating them well. If you have good people that are dedicated and loyal, you’re going to be able to leverage that human capital and do a much better job than some of the other companies out there that may not treat their people as well.