Narrator:
Welcome to the Harbert College of Business Podcast with your hosts, Sarah Gascon and Currie Dyess.
Today's guest is Jarred Miller, Director of Asset Liability Management for Synovus Bank in Columbus, Georgia. He has a degree in finance and an MBA from Harbert.
Sarah Gascon:
Jared Miller, War Eagle, and welcome to the show.
Jarred Miller:
War Eagle. Thank you for having me.
Currie Dyess:
It's a pleasure. Thank you so much for your time. So you've been at Synovus Bank for a couple decades. What made you initially decide to come to Auburn, choose the degrees that you chose, I'll let you unpack all that, and then ultimately go into banking. Obviously you're very passionate about it.
Jarred Miller:
Yeah, so I'm originally from Huntsville, Alabama and just grew up a big Auburn fan, so I kind of knew I always wanted to go to Auburn. When the opportunity came, I came to school here at Auburn, and going through the first year or so of basic classes and started thinking about my major and what I needed to do. And I had a strong pull toward the business side and I'd always done pretty good in math growing up so I chose finance.
It's been a good decision. Learned a lot at Auburn that I use, I mean, 20 years ago stuff I learned at Auburn, that I still use today in my current role here at Synovus. I mean a lot of your basic finance concepts, time value of money, interest rates and the shape of the yield curve, present value, discounted cash flows, all these kind of things that I learned at Auburn with my finance degree, I still use in my role here at Synovus in the banking world. And it's just been great and I do have a passion for it because just given the financial background, it works out well to use the things I learned here at Auburn.
Sarah:
And you went into grad school following your undergrad, correct?
Jarred Miller:
I did. I did. I went into grad school pretty much straight from my undergrad, got an MBA from Auburn that kind of was talking to my dad one day. I was getting close to finishing. He said, "You might want to look into grad school." So I started asking around and applying and it worked out. So I pretty much went straight from graduating the summer semester and going to school that next fall, but it worked out because I got through it and here I am.
Sarah:
What did you learn in grad school that was different from your undergrad?
Jarred Miller:
Yeah, it's a great question. I think in grad school I learned a lot of the same stuff that I learned in undergrad, however, to a higher degree. So we did a lot of that same stuff. But again, the higher degree, I got more specialized in things like options, so puts and calls and derivatives, swaps and things like that, other derivatives, those kind of things that got a little more heavy there that I learned in grad school that I use, again, that I use today. I mean with this position here at the bank, we do a lot of hedging and thinking about that kind of stuff. So derivatives are a big part of what we do here.
Additionally, some things I learned in grad school that I really keep with me, I mean somewhat of a personal thing, but also professional, is just the group of folks I got to meet in grad school at Auburn. People were from all over the world. I remember people from Turkey, someone from Turkey, Romania, Iran, places like that. I think it really opened my eyes being from Alabama and kind of living here all of my life. Got to see people from all walks of life and all over the world and it was just, we got to collaborate with each other and work on projects together.
So I learned a lot about teamwork, I learned a lot about just other people and being able to work in those team environments. And I think all of those really been beneficial for my professional career these last 20 years.
Sarah:
So how did you find your way into banking following... Was it following your MBA or was it while you were completing your MBA?
Jarred Miller:
Yeah, it was actually while I was completing my MBA. So at least in those days, and it may still be the case, we went from pretty much we started in the fall and went through the next fall semester. So fall and spring, we were in the classroom. In the summertime, folks that had been out in the real world working and came back to school could kind of take a break if you will.
But I, being straight into school, they wanted me to get an internship and actually found, I think I found it posted there in the business building on a billboard or on bulletin board an internship here at Synovus Bank. So I called over, I came and interviewed and I got the job. So anyway, did that for about, I guess it's six months or so while I was finishing school and the folks over here said, "Hey, come back and start working full-time," so it's really been a blessing for me.
Currie:
So the banking industry has, it's been a little chaotic in the last few months. How does that impact your role with Synovus and what are y'all doing to mitigate some of these big problems that are happening?
Jarred Miller:
Yeah, it's great question. So it's really pertinent to what I do here at Synovus. So I'm the director of asset liability management here, and really that falls within the treasury group within the bank and a lot of what we do is manage risk. And a lot of those risks that we manage are what led to the collapse of Silicon Valley and a couple of those banks back in March. And really that's a liquidity risk and interest rate risk.
So banks are exposed to liquidity risk and interest rate risk based on just the nature of the business. We borrow money from depositors, we take in deposits and we lend it out to borrowers. And so by doing that, we pay an interest rate on that deposit, we earn an interest rate on the loan. So if rates change in the market, we may have some interest rate risk that we need to be aware of as well as liquidity.
So we're taking in depositors money and lending it out. If all those depositors want their money one day, we got to have cash to be able to give them their money. So we manage the amount of cash that needs to be able to meet the needs of customers on a daily basis, but not hold too much to where we're not earning anything and not making money.
And again, the rate risk component with the markets changing out there right now. And that's kind of a lot of what happened with Silicon Valley is as rates went up, some of their assets devalued and investors got spooked and worried and the positives were worried and came and got their money and then the bank's gone.
So as that kind of happened, number one, we're always managing that stuff every day regardless but with that happening and the heightened risk, we just really had to, just had to keep our eyes open even more so than we had been. One thing that we did was we may have held a little more cash than a normal timeframe. On a normal day we might hold a certain amount of cash. During that timeframe we held a little bit more in the case that depositors just get spooked and want to come get money from us, even though everything's good here. But I guess back to the question of just what do we do? Just heightened risk management, heightened awareness, maybe a few things to help mitigate that risk as well.
Currie:
And what are some of the maybe harbingers that you might need to hold onto more cash?
Jarred Miller:
Well, I guess from the standpoint of just the market, I mean it really is a function of a lot of the funds that we receive are from depositors. So again, Synovus sitting here, operations are great going forward, but other banks even on the West Coast are having, there's a little bit of scariness. Well, I mean folks are still going to get scared. "I'm going to go get my money out because I don't know what's happening to banks." So the idea that that potential outflow could rear its ugly head at any time is kind of the main driver to hold some additional funds available in that instance,
Sarah:
Do you use a specific model or system to determine the level of risk?
Jarred Miller:
Yeah, that's a great question. So we use BancWare's ALM model. This model is used to essentially measure and quantify interest rate risk. And so by using that model, we can load in all our data and then forecast balances going forward. And that way we can assess, then what we can do is look at if interest rates stay flat or if interest rates go up or down by certain magnitudes, and we know how much money we make in those various scenarios. And that way we can manage that risk and see if there's any undue risk to certain interest rate environments.
Sarah:
Would you say you all are a little bit more conservative after what you've experienced over the past year?
Jarred Miller:
I would say that we, from a risk management perspective, we remain pretty conservative regardless on an ongoing basis. I mean, we're very prudent. I mean obviously risk management is you want to take risk, right? You don't want no risk. No risk means there's no return really, so there's a balance of risk and return, but I would say we still remain very prudent. But again, so I would say it's a somewhat of a no, but somewhat of a yes because I think we're already very conservative and prudent, but however, again, the heightened awareness has added some level to that as well.
Sarah:
What are some of the greatest financial lessons you've learned in your 20 years in finance?
Jarred Miller:
Well, I guess I've been here for 20 years. So during that time we've had some good times. We've had the great financial crisis, we've had Covid, and we're kind of in, I mean, we're not in a bad cycle right now, but we're in sort of an unknown sort of area. That may be the biggest thing is never think something can't happen. Always be ready for the next step, whichever way that goes, whether that's good or bad or indifferent in the middle. You've got to always be and have a plan for each of those circumstances. So I think that's the biggest thing I've learned in finance here.
Currie:
How has machine learning or AI impacted your job? And I guess a little more specifically, we are curious if it has allowed you to build out more robust models to input your data?
Jarred Miller:
I would say there's a lot of tools, a lot of, technology has added a lot of tools that have allowed us to automate a lot of the things we do. So maybe that's a good way to put it. I don't know that I have a ton of AI right in front of me, but I'm using models. I'm using Excel, but I'm using a few other things and there's some groups around the bank that are more within that AI space that can facilitate things for us.
So again, I think a lot of that stuff has helped to make things more efficient and help us automate things that to where we can read the numbers and understand that sort of thing and make those decisions like we're saying, versus having to spend all that time building a number or building the process. AI can help us be more efficient in getting that. That way we can focus on the outputs and the things that really matter for our strategic decisions ahead.
Sarah:
So tell us a little bit about your opinion or your perspective on crypto investing.
Jarred Miller:
I'm a prudent risk manager. I guess I could answer that two ways. I mean, from a personal standpoint, it scares me. I really don't understand it. And maybe the scaredness is not a good thing, but it's just a little bit, it's new and there's folks around here that believe in it. So I mean, I take it with a grain of salt, but I mean, from a personal standpoint, I'm a little scared.
I mean, from a bank standpoint, I don't think, we don't do much with it. There may could be some small investments we could make as a bank and be able to take some of that risk, but it would be pretty minimal because of the heightened risk on that stuff. I mean, we'd have to put a lot of capital behind it and that sort of thing. But nevertheless, I mean from a personal standpoint, it's a little too risky for me.
Currie:
Jared, you mentioned earlier one of the things that you were able to really learn at a deeper level in grad school were yield curves. I believe we're currently experiencing an inverted yield curve. Could you unpack a little bit what that is, an indicator of why it's important and what it means as we move forward?
Jarred Miller:
Yeah, it's a pretty loaded question, but I'll answer because I mean, for the most part, I can answer it halfway decent. But yeah, the curve's inverted. And a lot of what that means is really just for the audience, the yield curve is built on the idea of time. So the short end is one month to one year, and then past a year we'll call the long end of the curve. And so typically that has an upward sloping nature, but this inverted curve shows that those longer rates are actually lower than the shorter rate.
So what that's saying is let's say a five-year rate is lower than a one-month rate. That means if you invest for five years, you're actually going to receive a lower coupon than what you'd receive for one month. But you're tying those funds up for that term. And a lot of what that tells us is that that's really, that curve is driven by the market. And what that tells us is that the market expects those short-term rates to come back down over time. So for those longer rates to be lower than the short end, it's expected that short end will come back down.
Now, that short end has come up a lot this year because the Fed has been raising the FOMC policy rate, and so that's why that short end has come up. But again, market participants, they actually drove that long end up before the Fed raised rates. And then now as time has gone on and the Fed's raised those rates, they expect those rates to come back down over the next few years.
So again, a couple of things there. The expectation for rates to come down, receiving less coupon on a longer term than you would on a shorter term. And a lot of times you'll hear in the news that the inverted yield curve will signal a recession. That doesn't mean that we're going to have a recession, but it could be. And I mean in the case of the Fed raising rates like this, they're trying to slow the economy down to ease inflation. And so a lot of that kind of factors into all this. So it's not like they're trying to put us into a recession, but they are trying to cool the economy down. And so all that works together and we're left with this inverted yield curve at the present moment.
Sarah:
Do you have any concerns about what's occurring right now with that?
Jarred Miller:
I don't. I don't have concerns. We are being here sitting with a bank, we are curious as to what's going to happen next. Are they going to raise rates a time or two more in 25 bp increments, which is somewhat seemingly the case over the next few months, and then hold steady and how long do they hold steady? And then when do they go down? And that sort of thing. But I don't really have concerns.
I think the concern or the timing, I guess back to my thing there when it's going to happen is when is inflation going to start to pull back? Because really what they're fighting and it's kind being, it's been stubborn and sticky, so when will that come back down? But I don't have concerns that on the future is a big recession or anything like that. I think we'll be in a good spot.
Sarah:
So how difficult is it keeping up with all the regulations and making sure you all are in compliance?
Jarred Miller:
That's a great question too. I mean, that's a great point as far as just continued learning. I thought about that the other day. I mean, in these roles, you got to continue reading, you got to continue learning things. So yeah, regulation is a big deal for banks and the things that we do, risk management that we do, the regulators, they essentially, they don't make you, well, they do make you do that, but they don't tell you what to do. You go do it. You've got the autonomy, what have, to set up these things in your bank.
But they're going to come once a year and look at what you're doing, how you're doing it, ask questions, et cetera. But to that point, we've got to go stay on top of those regs, ensure that we're covering everything in the reg. Anything comes out that really pertains to us are we adjusting either systems or processes to account for that? So it is a big deal. I mean, we stay on top of that and so a lot of what we do is we're supervised by those regulatory agencies.
Currie:
And being in finance, obviously your world is consumed, your professional world is consumed with the continued education and hyper diligence. Looking at the numbers, macro and microeconomics, clearly there've been takeaways on a personal side. And our question here is there are so many folks that don't have financial education. They don't have financial literacy. They didn't grow up with it. I was one of them.
Do you have maybe any recommendations for some reading or personal continue ed, that our listeners might be able to get their hands on to just kind of understand what's going on in the banking world that maybe they can apply to their personal finance?
Jarred Miller:
Yeah, I mean, I've been blessed with the financial degree and finance degree and being able to manage my personal investments, kind of having that education and that understanding and I do think about that sometimes where folks, not everybody had that learning that I did. I didn't know any of that stuff before I went to college, so I did learn all that in college. And so without that, I think about that.
So yeah, I would recommend bankrate.com is a pretty good website that's just got, it'll tell you all the rates that are available on loans and deposits and things like that. You could find some literature and some information on that site. That'd be a good one to visit. Bloomberg is another one, and there might be stuff that you have to pay for here and there, but I think there's a lot of information and articles that you can find on that website.
Really, Bloomberg is very geared toward finance, and it's something we actually have on the floor here. And I would venture to say every bank has it and probably within other departments, but we have a terminal where we can get to a lot of other stuff. But nevertheless, the Bloomberg is geared straight toward finance, bonds and stocks and those sorts of things.
So those are two really good resources. Outside of that Google what is a stock or what is a bond? And just learn some of those basics. And especially if you did take finance 101, you'll start seeing a lot of the terminology you learned in that class and some of that stuff can help guide for folks like that that don't have as much of that finance background.
Sarah:
Do you have a number one or a favorite thing or resource that helps, that can help someone raise their financial awareness?
Jarred Miller:
I would probably say bankrate.com is a good starting point for sure.
Sarah:
Yeah, That seems like it. Well, especially if people are looking at interest rates.
Currie:
So Jared, what is next for you? Where does your journey take you?
Jarred Miller:
Well, I'd say maintaining a lot of what I do now. I mean, I guess a good point would be to step back just for a second. I mean, I've been here for 20 years. I did kind of start in more of an accounting role for about a year, and then I moved into doing a lot of what I do now, but it's not like 20 years ago or 19 years ago, I was doing what I do today. I've been able to gradually move up. I've got some folks under me that can help get some of the day-to-day stuff done. So I'm getting to look at a little more of the output and decide and make decisions.
So I guess in that vein, I kind of say that to say even though I may stick in this kind of role that I'm in, that journey upwards is still there within the role. Right now, I'm pretty satisfied with it. I mean, there's been, again, I've gotten to use a lot of the stuff I learned in school every day, and I've really honed in those skills. And so I feel really good about where I am in this position. So I think I'm going to stay the course and just keep moving upward.
But yeah, the future, I mean it's only 20 years. I've still got another 20 years I guess, of work and so the potential to move up to the next level or even to the treasurer of this bank, the treasurer is essentially the head of our whole department, something like that could be in my future. And I mean it's somewhat of a goal down the road. So just that continued advancement and continued upward movement within the organization.
Sarah:
What advice would you give the listeners that are current students or recent grads?
Jarred Miller:
Yeah, number one, I would say work hard. I grew up with, that's how I grew up, was you got to work hard at everything. Nothing's given. Everything is earned. And I've maintained that mentality my whole life, and I think that's why I've been very successful here. The folks that I've been around through the years have really appreciated my ability to just get the job done and at all costs, for the most part, and just work hard. It takes hard work. So work hard.
I'd also say believe in yourself and be confident. Don't doubt yourself. Say like, look, I know how to do this stuff. And it's going to be specific. You get a job, you got to learn some things but you know the foundation, just believe in yourself and be confident in what you do and the decisions you make. And like I said earlier, continue learning. Schools over doesn't mean your learning stops. Continue. Continue reading, continue learning. All those things will help you be better and be more prepared for the real world.
Currie Dyess:
Yeah, great advice, man. Work hard, be confident and continue learning. I couldn't have said it better. We couldn't have said it better. Jarred, it's been a pleasure talking to you, and there is so much information. I wish that we actually had more time, and this was long form because you're an encyclopedia of banking knowledge. Thank you so much for your time. One last thing. How can our listeners keep up with your story and possibly reach out to you if they want to follow a similar career path?
Jarred Miller:
Yeah, sure. You can find me on LinkedIn. Just search my name, Jarred Miller. That's J-A-R-R-E-D Miller. You can also email me. I'll give you two email addresses. My work email is jarredMiller@synovus.com. Again, that's J-A-R-R-E-D-M-I-L-L-E-R at Synovus which is S-Y-N-O-V-U-S.com. And you could also reach me at JarredMiller16gmail@gmail.com.
Sarah:
Perfect. Thank you.
Currie:
The numbers or the words?
Jarred Miller:
It is the numbers. So Jarred Miller 16, 1-6.
Currie:
Gotcha. Cool, man. Thank you so much for your time.
Sarah Gascon:
Yeah, we appreciate it. This has been an awesome interview. So definitely looking forward to hearing how your journey goes in the banking system. It's really great.
Currie:
War Eagle.
Sarah:
War Eagle.
Jarred Miller:
War Eagle. I really appreciate the time too, and thanks for having me and this has been great. It's great to meet you guys.
Narrator:
Harbert. Inspiring business.