If you want to comprehensively understand a bank from an investment perspective, you need to look at it through several different lenses.
Fundamental metrics are important, including those that measure profitability, efficiency, and growth. Investing metrics matter too, such as earnings per share, growth in book value, and dividend yield.
But there are softer, less quantifiable things that should be taken into consideration as well.
IMAGE SOURCE: GETTY IMAGES.
At the top of this list is a bank's culture.
Bank executives tend to extoll their institution's culture as a competitive advantage. Yet, most of the time they come across as just paying lip service to the idea, which is safe to do because culture is so hard to measure.
But this doesn't mean it's impossible to quantifiably assess culture, as there are proxies that can be used. In this case, I'm referring to employee approval scores of their CEO, which you can get from glassdoor.com, a popular employment and recruiting website.
With this in mind, here are how the CEOs of some of the biggest commercial banks in the United States stack up:
Number of Reviews
|Capital One(NYSE:COF)||Richard Fairbank||93%||2,543|
|U.S. Bancorp(NYSE:USB)||Richard Davis*||92%||2,297|
|JPMorgan Chase (NYSE:JPM)||Jamie Dimon||91%||5,247|
|Wells Fargo||Timothy Sloan||82%||991|
|Bank of America||Brian Moynihan||80%||6,595|
|PNC Financial||William Demchak||78%||1,236|
|SunTrust Banks||William Rogers||76%||733|
|Fifth Third Bancorp||Greg Carmichael||74%||156|
*DAVIS RETIRED EARLIER THIS YEAR AS CEO, BUT REMAINS CHAIRMAN OF U.S. BANCORP. DATA SOURCE: GLASSDOOR.COM.
At the top of the list is Capital One Financial CEO Richard Fairbank, who has led the credit card-focused bank since it was spun off from a former parent company in 1995. Fairbank earned the approval of 93% of the bank's employees on glassdoor.com.
Since the spinoff, Capital One has expanded far beyond credit cards, becoming a full-fledged commercial bank. It did so by buying multiple traditional banks, and is today the seventh-largest commercial bank in the United States.
U.S. Bancorp's Richard Davis ranks second, with 92% of employees approving of his performance. It's worth noting that Davis is no longer CEO of U.S. Bancorp, passing the baton earlier this year, but he remains the chairman of the bank's board of directors.
CHAIRMAN OF U.S. BANCORP, RICHARD DAVIS. IMAGE SOURCE: U.S. BANCORP.
If you're unfamiliar with Davis, I encourage you to read about his prudent and profitable approach to banking that enabled U.S. Bancorp to not only survive the financial crisis but thrive through it.
In third place is JPMorgan Chase's Jamie Dimon. Like Fairbank and Davis, it's hard to overstate the value that Dimon brings to a bank, as has been the case through his entire career.
JAMIE DIMON, CHAIRMAN AND CEO OF JPMORGAN CHASE. IMAGE SOURCE: JPMORGAN CHASE.
Dimon has focused JPMorgan Chase on maintaining a fortress balance sheet, was the first big bank executive to predict the onset of the financial crisis, and, as a result, was responsible for positioning the nation's biggest bank by assets to buy not one but two major banks at the behest of the government during the 2008 downturn.
After these three, the rest of the CEOs who made the list have employee approval scores below 90%. That's not necessarily a red flag from an investor's perspective, but it's not as much of a glowing endorsement, either.
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