12th
Annual Banking Conference attracted more
than 250 bankers interested in discussing growth strategies and
economic outlook
More than 250 regional and community bankers convened in Irving,
Texas, on Tuesday, April 22, 2014, and they were looking for
answers. As participants in Commerce Street Capital’s (“CSC”) 12th
Annual Banking Conference, these bankers came with concerns that
“business as usual” strategies are unlikely to produce satisfying
results in an environment of low interest rates, daunting
regulatory oversight and active mergers and acquisitions.
In opening the conference, CSC’s Chairman Tex Gross welcomed
bankers from throughout the Southwest and said, “There must be lots
of bankers interested in learning about the future because this is
our biggest attendance in 12 years.”
Providing an overview of capital markets and the banking
industry, CSC’s CEO and President Dory Wiley observed, “Valuations
of banks have strengthened significantly in the last two years, and
the market is now rewarding banks for being acquirers.”
“Large banks continue to outpace community banks in valuation,
but banks with footprints in Texas and contiguous states are
generally very desirable to acquirers,” Wiley added, noting the
importance of geography.
Regarding the low interest environment, Wiley explained that
“status quo” is a very risky position for bankers to take.
“Work hard to understand your interest rate risk, evaluate your
bond portfolios with an eye to reducing risk, strengthen your loan
portfolios and raise capital now,” Wiley advised.
“Growth Strategies for Community Banks” was discussed by a panel
of bankers who summarized their successful, yet diverse approaches.
Moderator Scott MacDonald, Ph.D, President and CEO of Southwestern
Graduate School of Banking Foundation at Southern Methodist
University, stated, “Every bank must shape its own successful
strategy; there is not a ‘one size fits all’ business plan.”
Panelist Al Jones, Chairman and CEO of American Bank in Corpus
Christi, Texas, said that key strategies leading to the recent
success of his $1.25 billion bank include aggressive growth of its
portfolio of mid-sized commercial and industrial loans and also
expansion into the new markets of South Texas and Austin.
Robert Weiss, Chairman, President and CEO of Beacon Bank in
Minneapolis, pointed to the importance of his bank’s culture of
training, professional development and comprehensive strategic
planning as the key driver of performance of his $340 million
institution.
CEO Dewey Bryant of Odessa, Texas-based SouthWest Bank
attributed his bank’s success not only to the good fortune of being
located in the “oil patch,” but also to a management team that had
worked together for 20 years and understands their customers and
franchise area.
Conference keynoter Rep. Pete Sessions (R-Texas) said, “Too many
regulators who don’t know or understand banking are making it very
difficult for banks to perform their critical roles in local
economies.”
Sessions encouraged bankers to visit their elected
representatives in Washington and urged them to take actions that
support free enterprise, such as fair representation on regulatory
committees and limits on egregious legislation.
C.K. Lee, Managing Director of the Financial Institutions Group
at CSC, noted that 2013 banking M&A activity nearly equaled
pre-financial crisis levels despite uncertainty about the impact on
community banks of rules made to harness global banks.
“The percentage of active banks which engaged in M&A during
2013 was very close to the pre-2008 level,” Lee explained. “The
absolute number of 2013 M&A deals was smaller, because there
are fewer operating banks today.”
Lee advised banks to strategically decide as soon as possible
whether they fare better as a seller or buyer because that key
decision will inform almost all other business decisions they
make.
“One of the main drivers of acquiring banks is the need to
deploy capital,” Lee observed. “For sellers, primary reasons to
sell are succession planning or regulatory pressures.”
Lee added, “Many bank boards are wondering how much better the
valuations can get and are concerned they may miss the window of
opportunity to buy or sell.”
CSC’s Carla Brooks moderated a panel that offered guidance in
navigating regulatory requirements. Panelist Robert Mahalik,
Director of Applications with the Federal Reserve Bank of Dallas,
said, “It is highly unlikely that any De Novo application will be
approved. Those wanting to start a new bank need to find a charter
and existing bank to start with in the near term.”
About Commerce Street Capital
Commerce Street Capital, LLC (“CSC”) is a private investment
banking firm headquartered in Dallas, Texas. Led by veterans of the
banking industry, CSC specializes in investment banking services
(mergers and acquisitions, valuations and regulatory issue
advising) and bank development (on-site consulting, sales and
management of bank capital raises, market assessments and the bank
regulatory application process). The firm provides tailored
solutions for all or part of a financial institution's business
lifecycle. For more information, visit
www.commercestreetcapital.com or call 214-545-6800. CSC is a member
of FINRA/SIPC.
This press release is for information purposes only and does not
constitute a solicitation or offer by Commerce Street Capital, LLC,
to buy or sell any securities, futures, options, foreign exchange
or other financial instrument or to provide any investment advice
or service. The testimonials stated within this press release may
not be representative of the experience of other clients. The
testimonials stated within this press release are not indicative of
future performance or success. The testimonials stated within this
press release are not paid testimonials.
C. Pharr & Company for Commerce Street CapitalKrystal
Morris, 972-931-7576, ext. 355krystal@pharrpr.com