Bankmark: Elements of Success
The successful positioning of an Independent Bank within its community begins with a well-developed and executed stock sale process. Not only is it imperative to raise the minimum required by the "offering", but it is also critical to place the stock squarely within the business community. This process enables the bank to immediately begin to expand upon the strong base built by its shareholders. With a strategy in place, this synergy develops around the strengths, weaknesses, opportunities, and threats of the individual, directors and bank officers. During the initial surge of new independent bank formations in the early 80's, the raising of capital was viewed only as an exercise in "selling the stock". However, as each regulated offering period expired, additional pressures were placed upon the organizing group. These mounting pressures created urgency, which in turn leads to a desperate frenzy to sell to anyone who will buy.
Concurrently, additional operational expenses are mounting, e.g. executive manpower, support staff, facilities, etc. In reviewing the success correlation between several independent banking organizations who used Bankmark and several which did not, the following parallels can be drawn.
- Strong, committed directors
- A stellar management group
- A commitment to excellence in following through
- A well-organized and implemented stock value process
- Soundly-developed, proven marketing and product strategies
- A non-cohesive director group
- Troubled or long stock sale process
- Slow growth caused by simply selling the stock vs. strategically "placing" the stock
- A marketing and product development program based on the perception of the directors that their collective personalities could somehow ensure the success of the bank.
During the organizational stage, these banks in organization lack a strong and diverse director group, and suffer from over-confidence in their ability to raise the necessary capital. While they are indeed given permission to organize by the regulatory agency, that does not necessarily translate into a guaranteed success. These may be Common Profiles but Different Approaches.
However, for each Bank which attempts to open and does not, or sells, the organizing directors are forced to absorb several hundreds of thousands of dollars of non-recoverable start-up costs. If the bank would have been successfully capitalized, then they could have recovered their approved advances from the banks capital.