Cross-Currents Driving Retail Bankers' Pay

If you work in a small community bank managing loans, loan workouts or retail banking, you should expect your cash compensation to exceed what you were earning last year by a double-digit percentage. But if you're the branch manager or chief credit manager, you're likely to be earning less than a year ago, according to a survey by accounting and consulting firm Crowe Horwath LLP.

Overall, base salaries at the 320 U.S. institutions - mostly small banks with less than $500 million total assets - edged up 2.2 percent this year and are on track to rise 2 percent again next year, Crowe Horwath says. But that average conceals divergences between those on the servicing side, whose pay grew as they helped their employers control damage from troubled loans, and those on the origination side struggling with limited demand.

A shortage of experienced loss mitigators helped push up overall compensation nearly 20 percent for loan workout officers and 10 percent for top loan managers.

"It's not that surprising that the position most responsible for restructuring loans saw the largest rise in compensation as its responsibilities rose during the economic crisis," says says Timothy Reimink, a senior consultant at Crowe.

Other retail-bank professionals doing well according to Crowe's survey include top retail banking officers (compensation up 13.9 percent this year), top human resources officers (up 12.4 percent) and chief internal auditors (up 8 percent).

Hiring Plans, Turnover Both Down

On the origination side, a lackluster volume of commercial loan business pushed down bonuses and kept average compensation flat for commercial loan officers. Credit managers, who make sure loan applications meet standards, saw their compensation shrink 6.4 percent. Branch managers' compensation dropped 5.8 percent after mergers eliminated many positions, tilting the supply-demand balance against both job-seekers and incumbents.

What's ahead in community bank hiring? Crowe's numbers suggest fewer folks are leaving and fewer banks are looking to hire. Sixty percent of respondents said they plan to maintain, rather than grow, staff levels. That's up from about 45 percent in last year's survey. Meanwhile, non-officer turnover declined to about 11 percent from 15 percent last year.

Smaller institutions located in small communities dominate the survey group. Only 21 percent of those responding had more than $1 billion in total assets. Nearly two-thirds had less than $500 million, and more than one-third had less than $250 million. And three in four were located in towns with less than 100,000 residents.