Travillian Tech-Forward Bank Index Profile I
The Zac Brown Band sings about everybody being in the “same boat, fishing in the same hole.” In that case, Reinbeck, Iowa-based Lincoln Savings Bank (LSB) must be using different bait.
When LSB, whose roots are in agriculture loans, saw its customers skyrocket from 18,000 to 3 million-plus in 12 months, they knew they were onto something. Now one of the 40 largest banks in the country based on customer size, Lincoln Savings was catapulted to the big leagues, and it happened seemingly overnight. LSBX, Lincoln’s banking-as-a-service (BaaS) arm, had broken the mold, and the bank would need to act fast on hiring.
During a conversation with Travillian, Lincoln Savings Bank CEO and President Erik Skovgard described how management was thrown into a tailspin, scrambling to build out the tech structure in record time to keep pace with the abundant growth the bank was experiencing. After a few hiring attempts, it was clear that they needed to reassess. And that is when Erik decided to blaze a new trail and expand the search horizon beyond the Cedar Valley.
LSB brought in Travillian to spearhead what would ultimately become a nationwide talent search, one that would lead to the hiring of fintech rancher Ryan Hildebrand as Strategic Innovation Officer, and legacy bank alum, aka risk maestro, William Peek as Chief Risk Officer.
“That’s when we called you and said, ‘Hey, we want the best person in the country, not just somebody we happened to stumble across on LinkedIn or something of that sort. So, we started down that path,” said Erik.
As the LSB management team met with high-quality candidates that Travillian presented, Erik was like a kid in a candy store and needed to whittle down the list. The key question he asked himself was how each person would fit into the organization.
In a coup for the heartland, LSB landed Ryan, a Cross River Bank alum, and William, who hails from BBVA before a short stint at USAA. Ryan and William’s decision to jump ship would instantly make them bigger fish in a pond that — while flourishing with $1.5 billion in assets now — was shallower than they were used to swimming in.
As it turns out, Erik’s leadership style and LSB’s nimble nature would win the pair over for the heartland.
Ryan was initially interviewed for the role of president of LSBX, the bank’s fintech arm. However, Erik quickly realized that the tech entrepreneur could fulfill a much bigger need at the bank, which the Cross River alum embraced.
“For me…it was interesting, being able to jump in and own strategy from the fintech standpoint and build something unique. I was super excited about the opportunity. Even though it’s a 120-year-old bank, it is a startup in my mind. If it were a larger bank that had a larger ecosystem built out, I probably wouldn’t be as excited,” said Ryan, who has since taken in the local sights, including visiting Field of Dreams in Dyersville and enjoying an Iowa football game.
For William, it was LSB’s hybrid model that piqued his interest.
“When I was determining, do I want to continue in much larger institutions, or do I want to look at a different kind of institution or different space — I think if LSB had been purely fintech or had been purely community bank/core bank, neither of those would have attracted me. What I love about my world is that every day I put one foot into traditional banking and the community banking space, and I put one foot into BaaS/open banking, really pushing the digital envelope and fintech. And that is such a challenging but a cool space to be in when you can stand on both sides of that,” said William.
When Ryan and William joined LSB, only a handful of remote employees were at the bank. Today there are over a dozen, from New York to Texas to Oregon. The rock-star additions introduced by Travillian’s Brian Love, Head of Banking & Fintech, and Keith Daly, Director – Banking & Fintech Search, have been game-changers, not only for LSB but also in establishing a model for other BaaS banks to potentially emulate.
Innovation was already in LSB’s DNA even before Ryan and William came aboard. The bank had purchased and embarked on a multi-million-dollar renovation — with the help of state incentives — of a 100-year-old former John Deere tractor factory into a state-of-the-art fintech hub. In one fell swoop, Lincoln Savings had become the Kurt Warner of BaaS. LSB modeled the facility after that of Square (now Block), one of LSB’s early fintech partners.
“It’s a small version, the Waterloo version,” said Erik. “It feels high-tech and doesn’t feel small community bankish. There are no white pillars on the front of the building.”
As both a community bank and a high-tech operation, the board challenged management to balance a strong ROA and create significant growth. In many ways, Erik explained, LSB is “the community bank version of a tech startup.”
However, only one thing was missing: the right talent to steer the community BaaS boat and keep the risk guardrails intact. As captain of the ship, Erik could do it for a while, but he would need to return to the helm before long.
“The board told me, ‘Erik, you have to quit dabbling in BaaS, and you have to get somebody hired. We need you to be CEO. That was a hard thing to hear because I enjoyed my dabbling,” he said.
The bank’s CEO appreciated Travillian for how Brian Love and his team interviewed LSB executives — including Erik and others — to learn the culture before endeavoring to find the right fit. Those discussions morphed from a focus on adding a fintech president early on to one on filling a wider role of strategic innovation, a concentration that now comprises 75% of Ryan’s job, the rest of which is on BaaS, which according to Erik, was merely a “starting point for us.”
Fortunately for Erik, placing LSBX in Ryan’s more than capable hands made the separation easier. Ryan oversees the LSBX team and the BaaS business, but his vision extends beyond his job description. For example, he architected an SBA all-online solution, strengthening LSB’s capability to work with smaller customers nationwide, which Erik described as a “huge win.”
The feeling appears to be mutual. Once Travillian introduced Ryan to Erik, the pair hit it off instantly.
“Erik’s just a tremendous human being with a very interesting background…of being a pizza delivery driver and then interning at the bank. That was his career path to being CEO of the bank. For me, that was interesting. He’s just a great guy, very humble — probably in some ways too humble, which we’re working on. We have to tell this story better; we have to pound our chest on all the great things that we’re doing and will be doing in the future,” said Ryan.
Erik, who started at LSB when it was a $70 million bank, is not opposed to nurturing local talent, including from his alma mater, the University of Northern Iowa. However, he explained how some homegrown stars don’t have experience at bigger companies and need to be trained and developed. Here again is where Ryan and William, based in Oregon and Brooklyn, New York, respectively, come in.
“Part of the deal that we’ve made is that you get to be remote, but I need you educating and developing core talent that lives in the Cedar Valley. We need you to develop local people so that someday, that’s where bench depth will be,” said Erik.
It has already paid off in spades for LSB, as evidenced by the contacts and relationships that Ryan and William have struck.
“Ryan and William were foundational hires for us. Ryan has added countless people not just in his department but in project managers and product managers — from all the people he knows. William, the same thing…And I would tell you both those guys, the impact they’ve had on our organization is a thousandfold in ways I would never have imagined.”
While Ryan ticked the fintech and BaaS boxes for LSB, there was still a hole around risk. This was a major challenge for the bank, which despite every reason in the book to play it safe decided to become a fintech bank. And while getting knocked down might be business as usual for other banks, it is not in LSB’s knitting.
“So, after we experienced exponential growth, we were like okay, we are either going to get the heck out of BaaS because we have no business being in it, or we’re going to double down, and we’re going to do it right,” Erik said. “When presented with the opportunity and investment required to do BaaS right, the board decided to double down and be all in.”
During the initial search, Travillian uncovered a few candidates with incredibly diverse backgrounds, culminating in the rise of the CRO role. The missing link was William, and Travillian was standing by to make this critical connection.
“When I think about the first conversations that I had with the management team, Erik and I did talk about the regulatory criticisms and the history of staffing challenges. Something that I’ve always enjoyed doing is coming in and helping build and grow and mature a program. And that was one of the things that stood out for me: being able to really shape and build a risk management practice and a team that, as I always say, can enable the business, not block the business. And we have a lot of runway and a lot of board buy-in and management buy-in to do that,” said William.
Before William entered the fray, LSB attempted to solve the risk management dilemma on its own, only to find that it was in over its head.
“We were comfortably getting [Travillian] all cued up, ready to begin the search full steam ahead. We had high confidence [Travillian] would be able to help us find somebody quickly,” said Erik.
One thing was clear: LSB needed to “get out of fishing in local ponds,” he noted. With Travillian by their side, the national search was on, leading to a paradigm shift and paving the way for talent from the likes of BBVA, Cross River, and beyond to join the Iowa bank.
“So, what we’re seeing is the people who got into those lines of business because they loved creating things, they loved being decision-makers, and they’re passionate about entrepreneurialism — it’s almost like their souls just got crushed in a big bank structure. So, they see us…a CEO like me and a board [that says], ‘Where do you want to take us? We’re willing to go for a ride if you know what you’re doing. Spread your wings and create something,’” Erik said.
As it turns out, that was music to William’s ears.
“[A] good problem that we have is there’s so much opportunity…for us as an organization developing our skills on how we prioritize, how we plan, and how we really look at what adds the most value because there’s so much opportunity. And our board has taken some pretty aggressive steps with this year’s budget just to reinforce how important that is and their willingness to buy into that,” he said.
Small Town Vibe
LSB has put Reinbeck, Iowa on the map. By removing the Iowa state lines from its talent search, the bank and Travillian have disrupted the community bank hiring model. While this was an exciting time, it also introduced some new challenges.
“How do you literally have Ryan in Oregon, a couple of people in Brooklyn, New York, people in Florida, people in Texas…how do we bring them back to the heartland? How do we create community and not lose that small town [vibe]?” Erik said. “Trying to manage the short term and the long term is pretty stressful because we are building this as we go.”
The bank turned to LSBX, its high-tech hub, to recapture that nostalgia. That is where the staff came together for one whole week to get to know one another in person. They worked together and ate meals together during that time, as Ryan and William met with their Waterloo-based teams.
“It takes commitment. And I think that’s something that I knew, for me signing up, I knew I would have to travel there, certainly earlier on, building those relationships, building the trust of my team…. spending time with my fellow leaders. As I tell people, having us all in one room would probably be easier. We can’t really deny that. But that’s not the world we live in. So now we have to be more deliberate, and it works well,” said William.
The building’s main kitchen area, which they call Main Street, is where the team gathers for keg parties. LSB is intentional about building culture and community among the staff, whether remote or local. In doing so, Erik says, relationships are stronger than they were before in many ways.
“It might not fit the cookie-cutter that we have designed, but cookie cutters aren’t a good way to build a business,” said Erik. And that has made all the difference:
“At community banks often times they are comfortable in the way they’ve done things, and this is how it is,” said Ryan, adding that what’s different about Lincoln is the ability of Erik and the board to think outside of the box.
“Because otherwise, if we don’t change, innovate and grow, the bank won’t exist. The bank’s been around 120 years, and it would be a real shame to have to sell to another bank and have this story end,” Ryan noted.
The fish are clearly biting at LSB, and Travillian is thrilled to be a part of that journey. Erik doesn’t hesitate to share his secret with other banks looking to move the needle on innovation, saying:
“Community banks shouldn’t be afraid to change, grow and even get punched in the nose. Where we sit today is thanks to the school of hard knocks. Now we have the team ready to sprint into the future.”