Former Integrity Bank exec discusses keeping local focus after acquisition

Tom Sposito, former Integrity COO, now serves as S&T's senior executive vice president and market executive. His banking career spans three decades. - (Photo / Amy Spangler)

When Indiana, Pa.,-based S&T Bank swooped into the region to buy Camp Hill-based Integrity in 2015, Tom Sposito went through the merger-and-acquisition drill for at least the tenth time in his three-decade banking career.

Sposito, former Integrity COO, is now S&T’s senior executive vice president and market executive. About two years after Integrity started its transition into becoming a division of S&T, he believes the merger is the best he has ever experienced.

Retaining talent and maintaining local management have helped Integrity keep customers of all sizes, despite the fact that the brand is now part of a larger company with $6.7 billion in assets, he said.

Integrity has also grown its community outreach under S&T, with employees raising money for the United Way, volunteering at area food banks and supporting other local causes with support from the bank.

“On a broad level, our management team and our board believes that we live here, we work here, we’re embedded in the community,” Sposito said.

About Tom Sposito

Lives: Manheim, Lancaster County
College: Bachelor’s degree, Penn State University; MBA, Lebanon Valley College
Favorite vacation spot: Outer Banks, N.C.
For fun: “I enjoy golf, Penn State football and family.”
Other career he considered: School teacher
One thing colleagues would be surprised to know about him: “I want to learn to play a musical instrument.”

Q: As someone who has gone through the merger experience, what do you think has and hasn’t worked?

A: I started in banking in 1985. There were over 16,000 banks back then. Today there’s, give or take, 6,000. I am not one of those folks who thinks we’re going to have that (16,000) number again.

From my perspective, this is the fourth time I’ve been part of being acquired. I’ve been on the buying end probably six or eight times. I think, without question, this is the most successful merger I’ve been a part of. We have a very sophisticated and talented team. Todd Brice (S&T President and CEO) and other colleagues on S&T’s executive management team believe in local management.

(Going into S&T’s acquisition of Integrity), we believed that there was brand equity that would survive the merger. We are even more successful as part of S&T Bank. One of the things that is remarkable for me is our “go live” date (for the acquisition) was 2015. And Integrity had its best year ever in ’15, and we’re going to have an even better year in 2016. And we’ve been able to take advantage of the disruptions that have taken place since then.

The lesson learned for me is the same as for anyone’s business: It is about people. We have outstanding people. That’s a very hard thing to duplicate.

Amy Spangler

How do you find high-caliber people?

One of the reasons we value (local) market management so much is you know those folks. The other thing we do is we grow our own talent. It’s something at S&T we spend an awful lot of time and money investing in. At the end of the day, the lesson I’ve learned is you’ve got to have the right team of people. If you think just because a bunch of mergers have happened you’re going to grow your business, you’re foolish.

One of the concerns about mergers is the fear that smaller customers get lost in the mix when larger banks take over the market. How do you mitigate that?

One thing I’m really proud of and one of my chief responsibilities when I came on was retention of our top talent. That’s how you keep focus (on smaller customers). I think one of the things I’m most proud of is we have lost really nobody that was part of our senior leadership team. And we’ve had honestly very little customer disruption. We’re well past that today.

Some experts have said the banking industry could see a boost in the coming year with the possibility of rising interest rates and a more relaxed regulatory environment under a Trump administration. What kinds of changes would you like to see?

One of the challenges, maybe the biggest challenge other than this dramatically low period of interest rates for banks has been the regulatory burden that’s been placed upon the industry. I would love to see a little more thoughtfulness, something that’s a little bit more pro-business without giving up any of the safeguards that are important in running a compliant company. I think the regulatory burden in some cases has gotten to a point of diminishing returns. I think (over-regulation is) one of the things that can hamper delivering innovation, research and development, hiring people.

Aside from that regulatory burden, what other challenges do you think S&T and the banking industry as a whole are facing right now?

One is our physical delivery. What do you really need in the future in terms of branches, number of branches, type of branch? All of that is being driven by digital change and consumer preference. Everybody’s got a device in their palm, something open on their lap, and it’s dramatically changed how we do business. I believe for the first time here recently we’re doing more digital transactions than we’re doing physical transactions. Our strategy is to be nimble and to be a fast follower.

From an industry perspective, my personal opinion is consolidation is going to continue. Part of the reason it will continue is some of the banks will not be able to afford the regulatory burden or the investment in (digital) infrastructure. As we go forward, I’m excited for our organic growth opportunities, but there will be other opportunities for banks to decide to find a partner. S&T would be a great choice.

Jennifer Wentz
Jennifer Wentz covers Lancaster County, York County, financial services, taxation and legal services. Have a tip or question for her? Email her at jwentz@cpbj.com.

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