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Bank chief is up for the challenge

Anyone arriving in the corner office of James Barger stops short at the view from the 17th floor of Legacy Tower. A 3-D panorama of the south and west side of the city stretches below, with the sun glinting off the Genesee River and cars moving sluggishly along I-490. Barger can look out from his aerie and decide, based on the flow of traffic, when is the best time to set out for home.

It’s one of the perks of being KeyBank’s Rochester market president. If the city roads are its veins and arteries, Barger can monitor its pulse out his window.

It may be his own pulse he should be monitoring, given the responsibilities he shoulders as he absorbs First Niagara Financial Group’s operations into a new and larger KeyBank in this market. Overall, the merger brings roughly 300 branches to KeyBank across New York, Pennsylvania, Connecticut and Massachusetts. The merger also adds roughly $29 billion in deposits and $40 billion in total assets to the KeyBank ledger.

KeyBank’s Rochester market, in particular, gets a big boost from the merger. First Niagara came to the deal with $1.4 billion in local deposits and an 8.2 percent market share in 2015, compared with KeyBank’s $1.1 billion in local deposits and 6.1 percent market share here. First Niagara brought 22 Rochester-area locations to the table, adding to KeyBank’s 24, though post-merger plans call for consolidating nine local branches.

In the works for months, the acquisition of First Niagara by KeyCorp was made official in July, but the tricky business of integrating the two banks, their customers and product lines remains.

Having made it past the hurdle of Legal Day One, when the parent companies merged, Barger is preparing for what he calls Customer Day One, when the signs and systems of First Niagara cede to the branding and software of KeyBank. With that day planned for the fourth quarter, likely sometime in October, customers and accounts throughout First Niagara will switch to KeyBank.

“There are a ton of details here; it’s kind of mind-boggling and I’d love to tell you it’s just around the corner, and everything’s going to be perfect, but there’s a lot of work to do. That’s what’s going on now,” he says.

The groundwork leading up to both Legal Day One and Customer Day One goes back for months, however, and reveals a lot about Barger’s management style.

“I have always first tried to tell people why we’re doing something and why we and our customers or our constituencies are going to benefit from that,” Barger says. “Even before I was introduced to the First Niagara team, I was here at Key talking about why this is going to be a great thing for us.”

And when he met with employees at First Niagara, he also emphasized the positive.

“They’ve done a great job of building their customer base. But in many cases they could only go so far with their customers,” he says. The new products and services that KeyBank brings to the table mean new options to offer clients.

“We’re no longer going to be the little guy on the block getting kicked around. We’re going to have to adapt to being the 800-pound gorilla,” he says, then adds with a grin: “But I think I can adapt to being the 800-pound gorilla.”

Challenges come naturally to Barger, who also describes himself as strongly competitive. His four children have absorbed some of that ethic from their father—the real reason for playing a game of Scrabble or table tennis at the Barger home is to try to beat Dad.

“Whupping Dad, many times, seems to be the whole point of it, so I have to try hard,” he says of their family game nights.

He might lose the occasional game of Scrabble, he confesses, but he still dominates at table tennis.

He’s just as determined that KeyBank beat the competition when it comes to offering the services and solutions that attract and keep new clients.

“He’s a work-hard, play-hard kind of business leader,” says Stephen Bregande, president of Seneca Falls Specialties & Logistics Co. Inc. The two men have known each other personally and professionally for about 15 years. “He’s competitive in everything he does.”

But Barger does not let that get in the way of building relationships. Faced with the upcoming integration of First Niagara and KeyBank staff, he started by organizing a social meeting for the two groups.

“We got together in a loose social environment and got people comfortable with each other,” he says. “That was bankwide. Then the individual lines of business got together socially before Legal Day One, so they got more personally familiar with each other.”

The social gatherings established a foundation that made what came after much easier. Barger says employees in both banks are now getting training, exchanging customer lists and identifying who to approach about the wider array of offerings they can offer.

One of the additions for the KeyBank side is First Niagara’s business insurance subsidiary. Suzanne Nasipak-Chapman, regional director of First Niagara Risk Management, will be staying on with KeyBank and continuing to lead this wing of the business.

Barger says he’s excited for the opportunity to work with her and to benefit from the many clients and contacts she has in the Rochester community.

“Part of the value of the acquisition is the promise of increased revenues from all these cross sales, and while in some cases we can’t cross sell yet because the products haven’t switched over, we’re getting to know each other and each other’s customer bases,” he says.

Barger came to banking via physics and the U.S. Navy. He earned his bachelor’s degree in physics at the University of Michigan on a Naval ROTC scholarship and then spent five years as a submariner, serving as a naval lieutenant based in Charleston, S.C.

The Navy might have remained his career choice until his oldest son, James, was born. A week later, he was sent out to sea for five months. The prospect of being away from his growing family for long periods changed Barger’s view about making a career in the Navy.

Instead, the Boston native went to Cornell University, which introduced him to Upstate New York. Once he earned his MBA, he went into banking, landing his first job in Buffalo. He continued to serve in the Navy Reserve for 15 years and ended his Navy career as a commander.

Barger did not enroll in business school planning to go into banking, but he found he enjoyed the course work. More than that, banking offered him challenges and a chance to use his brain, he says.

“It was an opportunity to interact with many businesses,” he recalls. “I liked the people; I enjoyed interacting with businesses. It was a good choice.”

Most of Barger’s banking career has been in commercial banking, where he has acquired a reputation for solving problems. To use a seaman’s metaphor, he likes untangling the knots that impede a business’s smooth sailing.

“It all starts with a kind of empathy and understanding what they do and what challenges they are facing,” he says of his work with commercial clients. This continues to draw him to commercial banking, where he recently helped a business whose complex loan arrangements were holding it back.

“The way the debt was structured, it was sucking out a lot of their cash flow,” Barger notes.

The loans involved a variety of different banks, but there was no coordination. Barger figured out a way to restructure the debt, persuading not just the client but all of the other banks involved that this was a better way.

“It was a lot of work on a fairly complex situation, but at the end of the day, we have solved this company’s problem. They’ve got liquidity, and they’ve got cash flow and they’re executing on their strategy,” he says.

Sometimes, solving a problem involves realizing you can’t—at least not with the obvious solutions. In another case, a business owned by two different families was struggling because the two sides did not get along.

Barger got the two families in a room to try to talk the situation over.

“I was a facilitator. I just wanted to learn what the real issues were and whether these two families were ever going to get it together,” he says. “And it didn’t go very well.”

With the two sides at loggerheads, Barger floated the idea of one family buying out the other. And suddenly there was silence in the room where previously there had been only rancor.

“Then the patriarch in one family and the matriarch in the other family—the ones that were kind of calling the shots—said, ‘We should consider that,’” Barger recalls. He described how this could be accomplished and three months later, the deal was done. One family continued to run the business and the other family walked away.

“That’s what makes the job fun, when you can step into a situation like that and really add value,” he says. “I really believe that my involvement with those two families made their lives better.”

Barger’s skills did not go unnoticed. In 2013, he was tapped to lead the Rochester market for Keybank, a move that brought him to Rochester from Syracuse. Barger says the leadership role felt natural after his time in the Navy, and he particularly enjoys encouraging those who work under him—for example, visiting bank branches just to show his support.

“I’ve definitely seen him mentor plenty of employees and promote their careers,” Bregande says. “He’ll develop everyone in the food chain to help the business and the employee’s career.”

It’s not just the banking world that has benefited from his support and guidance. Kate Bennett, president of the Rochester Museum & Science Center, values the role Barger plays as a member of the museum’s board of trustees.

His education in physics and his experience serving on a nuclear submarine made him a great addition to the board, she says. In addition, he came highly recommended, having served on the board for the Milton J. Rubenstein Museum of Science and Technology in Syracuse when he lived there.

“He’s an impressive strategic thinker,” she says. In key instances, he has been able to distill people’s thinking and guide the board in working through challenges.

“The most important thing is that he brings great experience to our community. He’s got a broad background,” she says.

Barger says one of the exciting things about the acquisition of First Niagara was KeyCorp’s agreement to spend about $5.8 billion over the next five years in Upstate New York. Most of the money will go toward loans to benefit businesses or housing in low- and moderate-income neighborhoods, but some $35 million will be available for grants.

The money will be focused in three areas: education, workforce development and neighborhood development. Barger says KeyBank is planning to partner with a charter school organization in the city, among other things. Most of the funding is unlikely to be allocated before January 2017, and he is involved in evaluating the options.

“That’s the fun stuff,” he says. “There are a lot of ideas out there and a lot of them have merit and we want to support the ones that will have the greatest impact.”

Far from being overwhelmed, Barger finds the responsibilities resulting from KeyBank’s acquisition of First Niagara invigorating.

“I’ve always liked change; I’ve always like challenging situations, and I enjoy problem solving,” he says. “What we’re going through now is a great example of that. The merger of the two banks is a great challenge, which to me, professionally—I’m enjoying the heck out of it.”

James Barger
Title: Rochester market president, KeyBank
Age: 52
Home: Pittsford
Education: B.S. in physics, University of Michigan; MBA, Cornell University
Family: Wife, Rita; sons James, 25, Scott, 23; daughters Julie, 21, Mary, 19
Hobbies: Cheering the Boston Red Sox, biking, reading, hiking with his family, skiing and beating his kids at Scrabble and table tennis.
Quote: “We’re no longer going to be the little guy on the block getting kicked around. We’re going to have to adapt to being the 800-pound gorilla.”

9/2/2016 (c) 2016 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email rbj@rbj.net.

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