Guest Blog: How Do You Start a Bank?

CapStarLogo_PMS303_PMS4515 2014

By Beth Alexander, Private Banker and Communications Director of CapStar Bank

With an ongoing 30-year career in banking, Claire Tucker had a terrific job as state president of a growing bank, doing what she loved and knew well. Then one day in 2007, she got a call from an old friend, a former bank president she had worked with nearly a decade earlier at First American Bank. He had an unusual proposition: Let’s start a bank.

That would mean giving up her secure current job in the upper echelon of her institution and starting to work on…a dream.

The idea for a new bank was confirmed by market research conducted to determine whether middle Tennessee really needed another bank. The research found that while very large institutions were well-served by large banks and mom-and-pops were getting the attention they needed from small community banks, there was a lack of service to the businesses in the middle—mid-size businesses and family businesses that were growing or going through transitions that required both expertise and patient listening on the part of a financial banking partner. This resonated with Claire: She believed it and believed she could sell it.

Working with her old banking friend, the future chairman of the board, they raised more than $88 million in the fall of 2007 from nearly 300 mostly local investors, people who, they hoped, would open accounts and generate buzz about the new bank, CapStar. At that time, the Dow hit an all-time high of 14,164, and prime rate stood at 7.75%.

They worked with the bank’s new board to develop an ambitious but realistic five-year plan and began hiring experts, many of whom came from the core of successful people behind First American, to build the bank—crafting its lending policies, purchasing the latest bank software, building a culture of hard work and a strong team. One of their outside-the-box decisions: hiring me, a magazine editor, to join their sales force of highly experience bankers. Scary? Yes. And exciting. During those early sales meetings before the bank opened, I had a hard time visualizing exactly how it all would come together. But our leadership team was brilliant, far-sighted and working every hour to be prepared for the day when the Fed would issue the letter that allowed us to open.

CapStar opened on July 14, 2008, between the meltdown of Bear Stearns and the bankruptcy of Lehman Brothers, followed the next day by the AIG bailout. By then, prime rate had dipped to 5.0% and only five months later, it sank to 3.25% where it has stayed ever since. On December 16, for the first time in history, the Fed lowered its benchmark interest rate to zero. Did I say it was scary before? What kind of chutzpa did it take to open a bank in this environment? While it seemed as if we were walking a tightrope, our timing was serendipitous. All around us, other banks experienced the softening of their loan portfolios, while we had a clean balance sheet and the capacity to lend. Because of this, CapStar was also an attractive option to those who wanted to take their gains out of the market.

Now I understand what happens when a bank is born. Claire never lost her cool or her sense of humor; she never let us lose sight of the mission to meet the needs of those underserved mid-size businesses, their executives and their workforces. CapStar adopted the tagline, We’re Listening, to reflect our single minded intent to deliver on exactly what the customer needs to fulfill a financial goal—not simply to offer a product but to find a tailored solution.

Within three years, we were operating at a profit, and today CapStar is one of only two billion-dollar banks in the country out of the more than 70 that opened in 2008. In the past seven years, we’ve purchased and integrated a terrific bank in Sumner County along with a mortgage division and added financial planning to our menu of services.

Because of Claire’s leadership and that of the other leaders around her, I’m surrounded by colleagues at every level who are not bound by a 40-hour work week. We’re available to our customers at night and on weekends, and I consider my customers and my coworkers friends. They’re also my inspiration to get a little more done each day, wherever it’s needed. We all perform whatever task is necessary to get the job done for the customer and, as a team, for each other.

It is an inspiration to work with our President and Chief Executive Officer Claire Tucker every day—a woman who is always 100 percent engaged, personally attentive and wise in many ways, not just banking, although that is no small thing. Claire says she’s a late-blooming entrepreneur, but though she may have come late to the start-up party, her years of experience, the respect she wields in the community and her personal integrity give each of us a standard to aspire to every day. I can’t imagine a more effective model for leadership.

And if any of us ever need anything from our CEO, she’s listening.

 

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