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Take Five: Putting some Popp in banking

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James Popp, CEO of Johnson Financial Group in Racine, likes to recount how he got into banking after being “fired” by the San Francisco 49ers, the Chicago Bears, and the Houston Oilers [now the Tennessee Titans]. Once football was done, the native of Libertyville, Illinois parlayed an economics major and a business minor into an MBA in finance from Vanderbilt University. Popp, 54, saw very different leadership styles from Bill Walsh and Mike Ditka, but our Take Five conversation focused more on the appetite for risk of today’s business leaders.

IB: Based on what you’ve seen with recent business lending, how would you assess the appetite for risk in the Wisconsin business community?

Popp: The economy is doing very well right now. We’re kind of long into the [business] cycle and generally in the banking business, when we get long into the cycle, more folks are willing to lend and it’s a very active market right now. We’re seeing a pretty competitive market, and the appetite for risk is going up a little bit.

IB: Does that include an increased interest in a metric that had been lagging — capital spending on business equipment by companies?

Popp: We started out in this recovery several years ago with what people were calling a jobless recovery, and then there was a little bit of trepidation about investing because people weren’t sure what would happen from a regulatory standpoint. In the past several years, there has been a little bit more optimism and so we’re seeing more capital spending. Our customers are building buildings, buying equipment, investing in their plants and equipment, and growing their businesses.

IB: How much did the tax reform law have to do with that? When you cut the corporate tax rate from 35 percent to 21 percent, and many pass-through businesses will also benefit from this law, they figure to have more wherewithal to be more confident.

Popp: Like I said earlier, certainly the absolute value of that from a tax standpoint is great for businesses and it spurs some activity. The other thing that really spurred activity was just taking away the uncertainty. There was some uncertainty about whether anything was going to happen or not happen, and when that started to abate a little bit, it freed people up to make investments that had been on the shelf for a little while.

IB: What does the Foxconn development mean for southeastern Wisconsin and the state in general, particularly the financial services sector?

Popp: Foxconn is an incredibly complex set of circumstances, projects, and other things. If it comes to fruition as we hope it’s going to, you can’t argue with bringing that kind of economic activity and jobs and business activity to the region. We’ll all be very pleased if it happens that way. From a banking and financial services standpoint, it means more consumers, it means more consumer lending, it means housing, it means building buildings, and it means attracting companies even outside of Foxconn to a region that has the capacity to lend to them and create great business opportunities. That high tide, if it all works well, will lift all the boats. There will be plenty for all of us to do.

IB: Given the interest, especially with younger consumers, in banking via smartphone apps, what’s your take on the long-term viability of bank branches? In a decade, will the bank branch be a fondly remembered relic?

Popp: That’s funny question and it’s a great question because I’ve been in this business for 30 years plus, and 30 years ago we were talking about the demise of bricks and mortar. I don’t know the exact numbers, but I suspect that the picture across the country is the growth in branches is in the single digit percentages, 3 percent maybe. Meanwhile, the size of the branches has gone down by 30 or 40 percent. So I don’t think branches are going away, but branches are becoming smarter, they are becoming smaller, they are more focused on what our customers and consumers value, and they are becoming more technologically capable. Our customers continue to come into the branch and use their technology, or our technology, to do business, but they also still want some personal face-to-face and connection. So it’s going to be a little bit of both, but bank braches will definitely be smaller and more focused on some of those things. The demographic is changing.

IB: You played tight end at Vanderbilt University and had stints with three NFL teams. From your experience in athletics, does playing sports build character or reveal it?

Popp: Both. That’s a great way to phrase the question. It absolutely allows you to build character and reveal character. What I love about people who have played sports — and not even just sports because I don’t care if you’re in a play, in the band, or in sports — anything that involves a team allows you to learn how to do your job and be part of a team, and do what you can do for the greater good of the organization as a team.

The flip side — revealing character — is it reveals those who can step up when things get really tough and those who don’t or won’t. So I think sports are a great avenue to build character and reveal character.


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