TARP Banks Business Strategy: Senior Executive Interviews (Wall Street Transcript)
Sat, 13 Jun 2009 13:55:00 Etc/GM
Topics covered: 20 TARP Banks--TARP Bank CEO Interviews--the Origins of the Crisis--Balance Sheet--Return of TARP Funds--Regional Banking--Business Strategy in Commercial Banking--Business Strategy During Economic Crisis
Companies include: Home Federal (HOME), HF Financial Corp. (HFFC), MB Financial Inc. (MBFI), Umpqua Holdings Corp.(UMPQ), First Community Bankshares Inc. (FCBC), Banner Corporation (BANR), Cascade Financial Corporation (CASB), Heritage Financial Corporation (HFWA), First PacTrust Bancorp, Inc. (FPTB), TCF Financial Corporation (TCB), First Niagara Financial Group (FNFG), UCBH Holdings, Inc. (UCBH), City National Corporation (CYN), Boston Private Financial Holdings, Inc. (BPFH), Pacific Capital Bancorp (SABB), Zions Bancorporation (ZION), Marshall and Ilsley (MI), Midwest Banc Holdings, Inc. (MBHI), Valley National Bancorp (VLY), Regions Financial (RF)
In the following brief excerpt from the 108 page report, the current CEO of First Community Bancshares, John Mendez, and the former CFO, Mark Wendel, discuss the development the bank's business plan. Currently, First Community Bancshares is a recipient of significant financial aid from the US Treasury. This interview is from February of 2006. Mr. Wendel resigned from the bank in June of 2006.
TWST: Would you outline the key items on your strategic agenda for thenext two or three years?
Mr. Mendez: We have positioned ourselves as a growth company in the Southeast, and currently we are pursuing expansion opportunities in fast-growth markets in both Eastern Virginia and in the Piedmont region in North Carolina. Our growth will continue to be achieved through a combination of acquisitions and de novo expansion. Our last two acquisitions were the CommonWealth Bank in Richmond, Virginia, in June 2003, and Peoples Community Bank in Johnson City, Tennessee, in March 2004. We also purchased Stone Capital Management, a Registered Investment Advisor, in January 2003. We've targeted growth in fast-growing MSAs and counties, primarily along interstate corridors in eastern Virginia and central North Carolina. Expansion other than by acquisition will be led by the establishment of loan production offices,which helps up establish a base of earnings assets, which can then be followed on by full-service offices. Two of our current loan production offices in North Carolina are actually scheduled for conversion to full service in late 2006. In the third quarter of 2003, we established de novo banking operations in Winston-Salem, North Carolina with three full-service offices, including the Charlotte, North Carolina, loan production office, which is attached to our Piedmont, North Carolina,region. This de novo operation has now grown to over $100 million and is currently funding over 60% of its own lending activities within market deposit activities. So that's an example of the de novo and LPO expansion, which we expect to continue and lead our growth and development in the coming years.
TWST: When you do an acquisition, how do you go about fusing the cultures?
Mr. Mendez: Obviously, people are very important, and our approach is different from many larger acquirers or consolidators that you will see. We attempt to find a strong management team with a command of their market, and we attempt to retain all key personnel in those transactions. We think that that establishes us within the community as a leading financial services provider, and that way, we are not an outsider moving into their community. Newly established regions are then connected to our key management processes through a Regional President who participates with legacy management. Training programs are also in place to disseminate the 'FCB Way' culture throughout the organization.
TWST: As you look out over the next few years, do you see any possible challenges or problems that could be causes for concern?
Mr. Mendez: Within the industry, we see continued margin pressures, andwe are operating in an environment with a flat or inverted yield curve.This pressure has intensified competition among financial services companies. This, in turn, creates a cycle of lending competition and yield tightening through loan portfolio efforts.
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source: http://biz.yahoo.com/twst/090613/infotarp1.html?.v=1