Michael T. Pugh, LISC's new CEO, is among Crain's New York Business 2023 Hall of Fame inductees, recognized for his mission-driven career in community banking and the structure and strength he brought to Carver Federal Savings Bank over the course of his leadership there. Read about his accomplishments and unusual trajectory from entry-level teller to bank CEO. Said Pugh, “You learn so much about the business [as a teller]. You also learn to listen to customers in a very different way.”
The excerpt below was originally published by Crain's New York Business:
Michael Pugh, CEO of Local Initiatives Support Corp. and ex-Carver Bank CEO
Michael Pugh started his banking career in one of the sector’s less glamorous but more familiar roles, especially for average customers: a part-time teller.
“I had agreed with my parents that if they helped me buy a car while I was in college, I would make the car payment,” he said, “and so I needed a steady place of employment to cover that car payment.”
Pugh would ultimately make the journey from an entry-level banking position to a top job in the industry, serving as the CEO of Carver Bank from 2015 until the end of this September, when he left to become CEO of Local Initiatives Support Corp., an organization that similarly aims to support underserved communities. And although Carver Bank, a Harlem-based Black community bank with about $700 million in assets that serves about 40,000 customers, was in rough shape when Pugh first came on board, he feels he is leaving it in a much better place.
“If I thought for a moment that they weren’t in a great position, I would not have been able to entertain leaving,” he said. “I would have, frankly, seen it as my duty to stay.”
Pugh’s career so far has also included lengthy stints at Citizens Bank and Capital One, but he said his time at Carver has been the highlight of his career. Stabilizing the bank to ensure its survival was his main task when he first started out, but as time went on, he was able to be more proactive about ways to improve the institution. These ranged from launching small business lending initiatives for the bank’s customers to ensuring they could use ATMs from Wells Fargo and JPMorgan Chase without paying surcharges.
One program Pugh is particularly proud of launching at Carver provides loans of less than $50,000 to small businesses. The program does not rely on traditional credit scoring, which can be a hurdle for people who have borrowed money from entities that do not report their payment performances, leaving them with a thin or nonexistent credit history. The program is going very well, he said.
“We’re seeing a 100% success rate with these loans,” he said. “All of these loans are being paid as agreed, performing well.”
Although the country’s major banks play an important role in both the American and the global economy, Pugh stressed that most of the financial institutions in the U.S. are community banks with less than $1 billion in assets, and it will be important to ensure that they stay healthy moving forward. Their smaller size lets them play a greater role in helping people at the local level than many of the larger banks, he said.
Pugh’s journey from a bank teller to a bank CEO is not especially common in the industry, but it does happen, and Carver maintained it had given him a distinct perspective on how the world of nance works.
“It’s a very unique position and opportunity to have started at the entry-level point in my career because you learn so much about the business,” he said. “You also learn to listen to customers in a very different way.”