Philadelphia Business Journal named Spring Garden Lending’s Chairman and CEO, Jay Goldstein, one of 12 “change agents” shaking up the financial industry in the Philadelphia region. Included is the entire article but we have taken the liberty to bump Jay’s recognition up to the top. However, all those recognized contributions are well-worth reading about.

Posted on 5/24/2018 by in News

 

CHANGE AGENTS SHAKING UP THE INDUSTRY
Philadelphia Business Journal
May 24, 2018

Jay Goldstein
CEO, Spring Garden Lending

Despite little experience in the sector, lawyer Jay Goldstein has built two unique financial services companies in the span of a decade. In 2006, he started Mount Airy-based Valley Green Bank, which had the highest return on equity when it was sold in 2014 to Univest Corp. for $76 million. Goldstein left Univest in 2016 to form Spring Garden Lending Group.

Located at 9th and Spring Garden streets, the company provides bridge financing to borrowers who could not get permanent financing. The capital will help real estate developers and investors renovate properties to sell or rent, at which point they could get permanent financing from a conventional bank. It creates its profit by charging about 9 percent interest — higher than the 4 percent to 6 percent charged by banks though much lower than the 12 percent to 15 percent charged by alternative lenders.

The company produced about $75 million in loans — most in southeastern Pennsylvania with some in South Jersey and Delaware — during its first year of operation and has been profitable for quite some time. Goldstein decided earlier this year to expand operation into Baltimore and hired former Valley Green colleague Bob Marino to spearhead the initiative as well as look for other possible expansion locales.



Why is Wells Fargo afraid of this nun?

Sister Nora Nash is part of a collection of disruptors shaking up the banking and finance industry in Greater Philadelphia

May 24, 2018

Sister Nora Nash is part of a collection of disruptors shaking up the banking and finance industry in Greater Philadelphia

Whether advocating for cleaner drinking water, keeping families in their homes, improving working conditions or seeking more transparency from management, you will not find a less likely, or more effective, change agent in corporate America than Sister Nora Nash.

As director of corporate responsibility for the Sisters of St. Francis, an order of about 400 Roman Catholic nuns in Delaware County, she spends much of her time coaxing conglomerates to behave in a more ethical manner.

Nash was co-filer of a shareholder resolution demanding Wells Fargo & Co.’s board order a comprehensive report about the root causes of the bank’s fraudulent activity connected to the September 2016 fake accounts scandal in which the bank admitted that in order to meet sales goals its employees opened as many as 3.5 million checking, savings and credit card accounts without customer authorization.

Nash led the engagement with Wells Fargo, along with 22 other co-filers who are members of the Interfaith Center on Corporate Responsibility, a New York-based stockholder coalition that has been engaging the top seven U.S. banks on controversies around risk, ethics and culture for several decades.

About 18 months after Nash and the ICCR filed the proposed shareholder resolution, Wells Fargo relented and agreed to publish a review that shows the root causes of the systemic lapses in governance and risk management that have led to ongoing problems, litigation and fines.

“What happened there impacted customers and shareholders,” Nash said.

“My problem with the culture there was that there didn’t seem to be an ethical rooting with the cross-selling, the lack of transparency and how employees were treated.”

Nash recently traveled to Des Moines, Iowa, for Wells Fargo’s annual shareholder meeting, where CEO Tim Sloan was peppered with questions on a number of topics, including company culture, predatory loan practices among minority customers, gun control and leadership. Shouts of “Wells Fargo, you’re the worst!” rang out during the meeting.

Sloan maintained his position on gun control, saying once again Wells Fargo believes it is the job of legislators to change gun policies. He says it is not the role of a bank to determine what products and services Americans can buy.

“The issue of guns is a human rights issue,” Nash said. “There were a lot of people who came to that meeting who were affected by the things that Wells Fargo has done and that continues. They were impacted. They lost homes or money through an auto loan or cross-selling. And they wanted a voice. But the bank does do a lot of good in the communities it serves. And that cannot be forgotten.”

In reaching its agreement with the ICCR in March, Wells Fargo management said it would work with the group. The company adopted a stakeholder council to which Nash was named a member and met with Sloan and other key executives in Iowa.

Nash said she has been in dialogue with Wells Fargo over a variety of issues for the past two years and believes it’s important to listen as well as push for change. Over the years, she has worked with companies such as Coca-Cola, Dick’s Sporting Goods, Chevron and Bank of America.

Nash grew up in County Limerick, Ireland. In her early life, she dreamed of becoming a missionary in Africa, but in 1959, she arrived in Pennsylvania to join the Sisters of St. Francis, an order founded in 1855 by Mother Francis Bachmann, a Bavarian immigrant focused on social justice.

In the 1980s, Nash said the Sisters of St. Francis decided to more closely monitor their retirement portfolio. They boycotted companies doing business in segregated South Africa and began pushing companies to become more socially responsible.

By 2002, Nash became the order’s director of corporate responsibility. She began pushing companies such as Hershey and Chevron on social justice issues such as workers rights and the environment.

But Nash really made a name for herself in the past year with not only the Wells Fargo resolution but serving part of a group of investors who put forth a historic climate-change resolution at ExxonMobile, which was passed with the support of 62 percent of shareholders. ExxonMobile board had recommended voting against the resolution.

“In my experience, the best way to be a change agent is to continue to work with the companies,” Nash said. “You build a relationship that is constructive and positive but keep posing questions and be persistent is seeking answers. Our agreement with Wells Fargo took years.”

Nash is one of 12 Change Agents we identified in the local financial services sector. The list also includes entrepreneurs, corporate CEOs, politicians and at least two blasts from the past that are still pushing boundaries.

CHANGE AGENTS SHAKING UP THE INDUSTRY

Tim Buckley
CEO, Vanguard Group

Since its inception in 1975, Vanguard Group has focused on Jack Bogle’s passive investment strategy and grew gradually into the largest mutual fund company in the world. But as Tim Buckley became CEO in January, the region’s sixth-largest employer has embarked on a significant period of change.

In February, Vanguard started its first actively managed U.S. exchange traded funds (ETFs). This comes on the heels of announcing plans to triple its employee base in Shanghai, China, opening a facility at 2300 Chestnut St. in Philadelphia focused on creating innovative products for clients, turning over a large percentage of its 11-person senior management team and agreeing to construct another office building on the 87-acre plot of land it acquired five years ago from Pfizer that can hold 1,600 more employees.

Buckley, 49, also takes over the company at a time of great social change. In a recent commentary posted to its website, the Malvern-based company, which is one of the largest investors in many stocks, said that it has been using its power to push companies on hot topics such as gun violence, the opioid crisis, and climate change.

David DeStefano
CEO, Vertex

For almost four decades, tax software provider Vertex was largely a family affair. Founded by Ray Westphal and then run by son Jeff Westphal, Chief Financial Officer David DeStefano became CEO last year and has been credited with refining the company’s core strategic direction and its underlying technology, called Vertex Enterprise.

Vertex provides software for every line of tax — income, sales and consumer use, value added and payroll — to the retail, communications, hospitality and leasing industries. Some of its clients have included American Honda Motor Company, Bristol-Myers Squibb, SAP, Starbucks, and Verizon Wireless.

Vertex Enterprise was introduced five years ago during the U.S. Open at Merion Golf Club.

DeStefano has been charged with managing substantial growth. That was highlighted last year when it moved into a new 168,000 square foot headquarters at 2301 Renaissance Blvd. in King of Prussia from a complex in Berwyn — essentially consolidating seven locations into one and receiving $1.2 million in Pennsylvania state grants and tax credits for creating 225 new jobs over the next five years.It has hired about 100 new employees in each of the past two years and now has 740 in this region and 916 worldwide.

Michael Forman
CEO, FS Investments

Since starting the alternative investment manager FS Investments in 2007, Michael Forman had the stated goal of creating opportunities for retail investors that are typically reserved for wealthy and institutional investors such as private pension funds and university endowments.

More than a decade later, FS Investments has grown from one fund with $110 million assets under management to 10 funds with $20 billion as well as over 300 employees and an 80,000-square-foot Philadelphia Navy Yard headquarters with an egalitarian office layout, on-site fitness center with personal trainers and health-centric café. What Forman has created is a mix of Wall Street and Silicon Valley, which has helped FS recruit and retain executives from companies such as Vanguard Group, JPMorgan and KPMG.

In December, FS entered into a partnership with global investment firm KKR to create the largest business development company platform — a form of closed-end investment company that invests in small and midsize businesses. That should mean more jobs at the Navy Yard.

Jay Goldstein
CEO, Spring Garden Lending

Despite little experience in the sector, lawyer Jay Goldstein has built two unique financial services companies in the span of a decade. In 2006, he started Mount Airy-based Valley Green Bank, which had the highest return on equity when it was sold in 2014 to Univest Corp. for $76 million. Goldstein left Univest in 2016 to form Spring Garden Lending Group.

Located at 9th and Spring Garden streets, the company provides bridge financing to borrowers who could not get permanent financing. The capital will help real estate developers and investors renovate properties to sell or rent, at which point they could get permanent financing from a conventional bank. It creates its profit by charging about 9 percent interest — higher than the 4 percent to 6 percent charged by banks though much lower than the 12 percent to 15 percent charged by alternative lenders.

The company produced about $75 million in loans — most in southeastern Pennsylvania with some in South Jersey and Delaware — during its first year of operation and has been profitable for quite some time. Goldstein decided earlier this year to expand operation into Baltimore and hired former Valley Green colleague Bob Marino to spearhead the initiative as well as look for other possible expansion locales.

Adam Holt
CEO, Asset-Map

Financial adviser Adam Holt first designed Asset-Map, a web-based platform that helps financial professionals build interactive visual catalogs of the people they advise, to aid his own client base. Then he expanded it to industry colleagues he knew in 2012 and to the entire financial advisory world in 2013.

Asset-Map creates a visual map that includes a client’s life insurance, retirement accounts, trusts and other assets. The idea came from motivational speaker Tony Robbins’ concept of mind-mapping as a visual notetaking process. With a background in art and architecture, Holt created Asset-Map to help all parties visualize all of the current people, entities and financial instruments that are involved, but also tracks progress to funding goals and shortfalls. Now, more than 3,000 financial advisers, representing 300 firms from large global firms to small independent operators, are using Asset-Map to give clients a clear plan for their financial life that they can understand, follow and adjust as needed.

The startup, mostly self-funded and currently profitable, didn’t launch any marketing efforts until about two years ago, when it relocated from the suburbs to Old City. Last year, Holt was selected as the winner of the Chamber of Commerce for Greater Philadelphia’s Technological Excellence of the Year Award.

Ami Kassar
CEO, Multifunding

Before its implosion in 2010, Ami Kassar spent nearly a decade at the small business credit card company as chief innovation officer and senior vice president of business development and Internet strategy. He used his experience in the financial services, small business and technology worlds to create Ambler-based MultiFunding, which helps small businesses find the right lender.

Lenders provide MultiFunding with criteria for potential commercial borrowers. Instead of applying for a loan one bank at a time as borrowers normally do, MultiFunding helps small businesses find what loan product is best for them, and then helps put together a centralized credit application — which it distributes to the hundreds of lenders in its network.

Kassar has carved out a niche as a national expert on small business credit. In addition to writing a regular column for Inc.com and advising the White House, Federal Reserve Bank and U.S. Department of Treasury on the business credit markets, he recently authored a book, The Growth Dilemma: Determining Your Entrepreneurial Type to Find Your Financing Comfort Zone, which helps entrepreneurs sort through choices to build their businesses to the size and complexity that makes the most sense.

 

Stacey Mosley
CEO, StepWise Analytics (formerly FixList)

Always interested in data and design engineering, Stacey Mosley spent the beginning of her career working as a data scientist for the city of Philadelphia. Assigned to the Department of Licenses and Inspections, she wondered about the status of the city’s rundown buildings.

In 2015, that led her to leave city government to start FixList, a software company which provides real estate and data tools to developers, lenders and nonprofits seeking to redevelop properties in the city. The Callowhill startup’s mission is to help facilitate the reduction of blight through efficient use of information.

The company, which announced this week that it has changed its name to StepWise Analytics, says its main differentiator is its “Redevelopment Score,” which ranks properties on their potential for revitalization. StepWise also offers a blog that updates clients on issues such as the fate of tax abatements in the wake of Mayor Jim Kenney’s decision to once again raise property taxes or a report on the new construction market.

This year, StepWise also raised $400,000, its first foray into venture capital, which they used for expansion into Baltimore and planned expansion into Washington and Boston later this year. It also has hired two new full-time employees to join Mosely and co-founder Mjumbe Poe.

Jeff Shanahan
Executive Vice President, First Data Corp.

Jeff Shanahan moved to the region, grew his payment processing startup CardConnect, took the company public and sold it to one of the world’s biggest card payment and e-commerce processors for $750 million. All in five short years.

When the deal closed last summer, Shanahan continued to lead CardConnect operations from its King of Prussia offices and serves as a member of Atlanta- based First Data Corp.’s management committee. The deal brings one of the largest companies in its space to the region and potentially many more jobs. At the time of the deal, CardConnect processed about $26 billion of volume annually from about 67,000 merchant customers and was one of the largest distribution partners for Atlanta-based First Data.

CardConnect, which continues to operate as an independent brand led by Shanahan, is known for its integrated payment solutions that link to internal enterprise resource planning (ERP) systems. It enables clients to accept payments directly through any type of business management software. Clients include locals such as Airgas, Amerigas and Honeygrow as well as General Electric, Social Security Administration, Jelly Belly, Zebra Technologies, Beachbody, and Bob’s Discount Furniture.

Josh Shapiro
Pennsylvania Attorney General

Like many Democratic state attorneys general, Josh Shapiro has taken it upon himself to fill a void he believes has been created by the Trump administration’s loosening of the regulatory enforcement approach from the Obama years. He and other state AGs recently sent a letter to Facebook demanding answers on its privacy policies after the Cambridge Analytica breach of user data. He also sued Uber over a 2016 data breach, launched an investigation into a recent Equifax breach and sued student lender Navient for alleged abusive lending practices.

Shapiro took things a step further by forming a consumer financial protection unit at his office last summer with a former Consumer Financial Protection Bureau official at the helm.

With Obama appointee Richard Cordray gone as director of the CFPB and President Donald Trump bound to appoint someone with a less aggressive enforcement posture toward the financial service sector, Democratic state attorneys general have amped up oversight.

In March, Shapiro said his office would launch an investigation into claims of discriminatory mortgage lending policies in Philadelphia after reports of alleged redlining surfaced.

Vernon w. HIll II
Chairman, Republic First Bancorp

Jay Sidhu
Chairman and CEO, Customers Bancorp

No, you haven’t been sucked into a time warp and sent back to read a 1996 version of the Business Journal. Vernon W. Hill II and Jay Sidhu are best- known for changing the banking landscape in the 1980s and 1990s as CEOs of Commerce Bancorp and Sovereign Bancorp. Each was removed unceremoniously as the leaders of those two companies before the banks were sold to TD Bank and Santander Bank.

But it didn’t take either long to get back in the saddle and become change agents again. But while both had a retail-centric strategy at their former banks, they have forked in different directions in their new ventures.

Hill, 73, founded Commerce in 1973 and grew it from one to 470 branches by 2008 with a retail-friendly model that included branches open seven days a week with longer hours than banks typically stayed open. But he resigned in 2007 after months of pressure from federal regulators who were investigating his real estate dealings.

While regulators made life difficult for Hill in the U.S., in 2010 he created Metro Bank U.K. It was a disrupter in England, where 85 percent of all bank accounts were held by just five institutions. It recently recorded its first annual profit on 51 percent revenue growth. It has 55 branches and 1.2 million customer accounts.

Back home, Hill served as an investor and adviser for struggling Republic First Bancorp, which he quietly helped transform in the image of Commerce — free checking, coin counting machines, pet treats, longer hours and a new red logo. Hill officially became chairman in late 2016 and it has grown to $2.5 billion in assets with the same aggressive branch expansion scheme Hill employed at Commerce.

Sidhu grew Sovereign from a $500 million struggling thrift into an almost $90 billion-asset bank over his 20 years at the helm before being forced out by activist board members.

Since taking over Customers Bank in 2009, he has grown it from $265 million to $10.8 billion in assets but with a different strategy than employed at Sovereign. His focus has been on technology and business banking and less on retail. It has kept overhead low with just 15 retail branches and 10 offices designed for loan production and wealth management spread through eight states.

Sidhu’s daughter, Luvleen, runs BankMobile, a no-fee digital banking subsidiary formed a few years ago which will be spun off into its own company later this year.

Jeff Blumenthal
Reporter
Philadelphia Business Journal

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