Dave Parmley retired today, May 2, 2024, ending a 44-year banking career, including the last seven years as Cedar Rapids market president for Great Western Bank and, most recently, First Interstate Bank. Mr. Parmley agreed to respond to a list of questions prepared by the Corridor Business Journal regarding his career, ranging from his banking […]
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Dave Parmley retired today, May 2, 2024, ending a 44-year banking career, including the last seven years as Cedar Rapids market president for Great Western Bank and, most recently, First Interstate Bank.
Mr. Parmley agreed to respond to a list of questions prepared by the Corridor Business Journal regarding his career, ranging from his banking experience to the most significant changes he’s seen in the financial industry over the years.
Here, in lightly edited form, are those questions and Mr. Parmley’s answers.
CBJ: Can you summarize your career, beginning with your first job in the banking industry?
Mr. Parmley: I began my career in lending to businesses in Eastern Iowa with what is now Farm Credit Services of America, where I served almost exclusively farm clients in Delaware and Dubuque counties from July 1980 into December 1983.
In mid-December 1983, I accepted a position as vice president for what was then First State Bank in Manchester, where I wore lots of hats, including changing the light bulbs on the time and temperature sign! Most of my time was spent lending to grain and livestock producers, ag businesses, Main Street small town retail business, and light commercial manufacturing companies. This was all during the farm crisis of the 1980s, which forever altered the fabric of rural America, and our state.
Much like the Federal Reserve Bank is doing now, increasing interest rates was a tool they used to combat inflation, but on a much quicker and extreme scale. The prime rate skyrocketed in July 1980 when I began my career, from what was already 11% then to an all-time record high of 21.5% on December 19, 1980.
The impact of their decision brought the economy in Iowa and much of the country to its knees. Farmers faced foreclosures. Small town businesses closed. Manufacturing companies, especially those serving the production ag sector, laid off thousands of workers. And dozens of banks and savings and loans failed.
It’s hard to describe how painful this period was, and yet I would also say it also was a period where I gained a tremendous amount of respect for the resiliency of my clients, community, and the state. By mid-June 1985, rates had “stabilized” to average rates below 12% and at times below 10%, and by the 1990s the prime rate had normalized between 6% and 9.5%.
With lower rates came cautious optimism, and it was actually fun to be in the business. By then I had been promoted to Executive Vice President and a Director at First State Bank. Life was good, but a life event was going to alter my life and career path in a good way.
I met my wife, Anne, who was from Cedar Rapids, and we were married in July 1996 and soon, after hard reflections and more than a few tears, decided to pull up stakes from a community we both loved. We moved to Cedar Rapids in the summer of 1997 with the thought that this presented both of us with opportunities to grow.
I worked for a couple of great banks of various sizes in this market over a four-year period before accepting an opportunity to join Bankers Trust in November of 2001. This was a chance to be in on the ground floor with a team of bankers I had got to know over the previous four years, including a couple I had worked with and start a “de novo” bank from scratch with the support of a parent bank, Bankers Trust of Des Moines, which was the largest privately owned bank in Iowa.
We had a great team and experienced tremendous growth in our community. The economic environment was sound. Cedar Rapids was growing. Then in 2008 came the housing bubble, and locally the flood. The flood was devastating to the community, yet it created jobs and construction projects at a time when the national economy was literally on the brink of collapse.
To aid the economy as a whole, and certainly to the benefit of the community, the Fed dropped rates, contributing to a record low prime rate of 3.25% in December 2008. One of the highlights of my career was seeing the community come together and rebound from the devastation and navigate through the challenging national and world economic environment so successfully.
In 2017, I was approached by Great Western Bank (now First Interstate Bank) to open a loan production office and later a branch bank here in Cedar Rapids. I was fortunate to have a small yet talented team, and we experienced nice growth.
All was going great until the first quarter of 2020, when COVID-19 hit and altered the entire landscape of the world, including the way people work. It was a devastating period and dramatically impacted the local and global economy, which brought about a variety of elements impacting everyone, including the banking world.
Dramatic rate cuts occurred again in March 2020 to prop up the economy. The PPP loan program was rolled out by the government, and banks frantically pivoted normal operations to process requests. Once again, the community came together to navigate the uncharted waters of this global pandemic, noting that the impacts from this event, specifically the working from home aspects, have created challenges as we continue to follow a path to this “new normal” for many businesses, including the banking industry.
The state and national economy are still feeling the impacts and aftershocks, with many recession-like impacts still in play for many businesses in part because of interest rate hikes designed to slow growth and reduce inflation. And it was at this point that I decided to turn the landing lights and drop the landing gear and enter into retirement, 44 years from the day I walked across the stage when graduating from college.
What brought you to banking as a career choice?
I grew up on a farm near Grinnell, and knew this was not a career path I wanted to follow. Farmers have an amazing ability to accept so many risks that they can’t control, and I was not wired for that.
So a year after graduating from high school, I attended South Dakota State University in the fall of 1976, with intentions to explore several career paths. I was interested in the rapid advancements taking place in agricultural technologies, including genetics for seed companies and livestock, along with equipment at places like John Deere or Kinze Manufacturing.
And yet as I started taking classes, I developed an interest in economics and business, especially as it tied to agriculture. While in college I worked for a professor in the economics department who taught farm management related classes. I liked the idea of a career I could do for 40-plus years. And I really liked the idea of working with business people to find a solution to issues and grow their businesses successfully.
What has your banking career given you, both personally and professionally?
My biggest takeaway is the absolute joy and pride I feel in seeing businesses I work with, and even watching non-customers I have relationships with, grow and thrive.
Capital investments that banks have supported generally help create wealth and jobs, and for retail customers to buy a home, a car, etc. To some degree, the lending fundamentals are essentially the same from the first day I started until now, yet the industry has changed dramatically.
Personally it has offered me flexibility, upward mobility with time and experience, and solid salary and benefit aspects. I have made so many friends, including many who I compete with.
Like most industries, the banking industry has changed dramatically over the past 44 years. What are some of the positive changes that you’ve seen?
I don’t know if this was totally a positive change, but you have to understand that the internet was not a thing in 1980 – no cell phones, no Microsoft, paychecks were not automatically deposited. Notes were typed and signatures done in person. Customers came to the bank to cash a paycheck, noting they had to do this when the bank was open. Our bank’s staff got to know our clients personally at many levels … business and personal, often daily or weekly. Yet it was a bit inconvenient or more time-consuming for the customer.
With time and technological advances, banking has become more transactional and convenient, more paperless. Paychecks are generally deposited into a client's deposit account. Money is readily available at ATMs 24/7/365 in a variety of locations literally all over the world. Cell phones and PCs give you the same kind of access to checking balances, transferring money, making a loan payment, even depositing a check with your phone. Commercial customers and bankers can transmit documents securely (including remote deposit of checks) electronically. Many documents can be executed with an e-signature.
The need to go into the bank has been dramatically reduced – ery convenient but certainly the face to face visits are less frequent. I still maintain close relationships with my clients, but nothing like it was in “the good old days”!
Conversely, what are some of the issues that have arisen to make banking more challenging?
The bad guys have gotten a lot smarter … billions and billion in domestic and global fraud losses and scams annually. Politics and fed policy are unpredictable. Dramatic increases in bank regulations have pros and cons. Who knew that a global pandemic could happen and alter life as we know it so dramatically at some many levels? Should I mention that credit unions don’t pay taxes?
Any particular memorable anecdotes you’d like to share about your banking experience?
So many, but this one ties to auto deposits, and in this case Social Security checks.
The Social Security Administration began pushing the direct deposits of these checks in the 1980s. “Social Security Check Day” was always a busy day at the bank. Our lobby would be busy with our valued senior clients.
One bitterly cold day, one of our regular customers I knew quite well was in. I greeted her, we both mentioned the cold weather, and I shared details about the option to have the check deposited, which would save her time and she would not have to venture out in unpleasant elements.
She turned and pointed to our first teller window and said “You see Marcia? She’s been a teller in that window longer than I can remember. Every time I come in with my check, she greets me by name, asks me how I am getting along, we talk about the weather, and she asks if I have any new pictures of my grandchildren. I use this day as a reason to get out of the house and have lunch with friends and run errands. I so look forward to this day each month. Why would I want to have my check automatically deposited and miss out on all of this?”
The COVID-19 pandemic has forever altered the business landscape, and banking is no different. How do you feel the banking industry has adapted to the post-pandemic “new normal”?
Certainly, virtual contacts using something like Teams or Zoom are used more regularly to visit with organizational team members, along with clients. While I always prefer an opportunity to meet in person, the acceleration of this technology probably would not have been possible without COVID-19. And in today’s environment many key customer team members are able to work remotely, including locations far from my office, so hopping on a virtual call is cheaper and easier for everyone.
Yet this ability to work remotely has had a material impact on workforce in the office and related impacts to occupancy levels for many commercial buildings. Secure portals are used more often to share documents. And the growth and acceptance of DocuSign was a byproduct as well.
What are the next challenges that the banking industry will face?
Bank fraud will continue to be a challenge. The evolution of AI will have a major impact with so many elements to be determined, including how the bad guys will try and use it.
Like many businesses there are many bank team members in the baby boomer generation who are retiring each day – experienced bankers who have been through many economic cycles.
And this shrinking workforce will be a challenge for our commercial clients. Global events impact our community and industry now more than ever. I don’t know if it is a challenge, but I am guessing that we’ll see more consolidation within the industry – fewer banks in part due to economies of scale, the shrinking workforce, and to some degree smaller rural communities shrinking, and also due to the costs of the increases in regulations.
And there are always the unknown risks that we don’t see coming – things like the pandemic, or locally the flood of 2008 and the derecho, or a new game changer technology – things like the internet, Microsoft tools, cell phones, Amazon’s impact on retail or AI.
Are there particular people that have been especially influential in your career journey?
I could go back to a job I had in high school working for Fareway, with managers there who gave me tremendous responsibilities and served as strong references that helped open doors later in life.
So many positive relationships while attending college. I have been fortunate to have had so many people as mentors, both within the industry and many simply as friends. I can’t list them all.
The 1980s were really challenging – really hard, gut-wrenching decisions being made. I had great bosses and co-workers within Farm Credit and at First State Bank in Manchester navigating this period of my lending career, and frankly so many great customers ready to adjust and pivot to survive.
Once in Cedar Rapids I worked with and admired Harold Becker, Steve Shepherd, Steve Caves, Tim Kintner, Pat Deignan, Melissa Schooley, and Bart Floyd. I learned things from all of them during periods of rapid change, and also during periods when there were material headwinds.
So many of my competitor banks have great individuals and teams who I am friends with, and I admire the work they have done in this community. It takes a village, as they say, where the rising tide lifts all the boats.
And I have to mention my team members who joined me early on when I joined First Interstate, especially Warren Bynoe and Keith Eibey who are outstanding individuals and bankers – smart and customer-focused. And I am very excited for Zach Bohannon, who is taking on the role of market president when I retire.
I am not able to share customer names, but I have been blessed with some outstanding customer relationships who have met so many storm clouds head-on and thrived.
What are your plans in retirement?
Certainly the ability to spend more time with family and friends. Our son lives in Des Moines, and our daughter in California.
I am looking forward to volunteering at a few nonprofits I have identified. I am hoping I can do better on wellness aspects, such as diet and exercise. I enjoy golf, fishing, travel, photography, and hanging out with my dog, among other things. I have a few ideas for classes I might like to take. And I have a long list of books I would like to read or listen to.
I am blessed with an amazing wife to join me on my new phase and the related adventures. Too often the words epic or game changer are used, but this past season we had season tickets to the Iowa women’s basketball team, so we’ll continue to do this, and as a result I recently added something I never thought would be a bucket list item, but attending an Indiana Fever WNBA basketball game sometime this year has moved to near the top of the list!
What do you hope will be your legacy in the industry?
In trying to get a path to a win-win "yes", I think I treated my customers the way I would want to be treated, noting that sometimes the answer was "no."
