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Bankmark: Perceptions and Realities

In order for a community bank to be successful (as defined by profitability and shareholder return), a capital acquisition program must go beyond merely selling stock. The mission is to place the stock in the hands of influential investors who, in turn, will form the core of the bank's business base. Bankmark has developed a strategy that exposes the new bank to those investors in the most cost-effective and timely manner.

The Bankmark program builds confidence, dispels unfounded concerns, clarifies issues and develops a win-win situation for both the investor and the Bank. This key investor buy-in is what builds and maintains long-term bank growth.

During the initial stages of organization, everything seems very reasonable and logical to the organizers.

Perceptions according to the organizing group:

  • The community needs a local bank to fill a void in the marketplace.
  • We, the organizers, are successful individuals.
  • Our success is directly transferable to a capital program.
  • The economy is recovering, so this is an ideal time for a new bank.
  • We will all pull together and share the workload equally.
  • We are well connected and respected within our sphere of influence.
  • We only need to raise $x; that can't be difficult.
  • Most folks will honor their verbal promises to buy the stock.
  • I made the contract; the President goes by and picks up the check.

Perceptions according to the community:

  • Yes, a community bank would be nice, but.
  • Yes, we like and respect some of the organizers.
  • Yes, it sounds like a good idea, but isn't the day of a small bank over?
  • I'll think it over, get back to me in a month or so.
  • I spoke with my "advisor" and he/she said banks are not strong investments.
  • I think I know what's in it for you, but what's in it for me?

Realities according to Bankmark's experience:

  • Realistically, only 10% of those you contact will buy (20% at best).
  • 60% of those who do invest are individuals not directly tied to the group.
  • Less than 50% of the organizing group can be counted upon to produce.
  • Less than 35% of the people signing "non-binding" agreements will follow-up with a check.
  • No matter what anybody tells you, there is never enough time and it always turns out to be a tougher job than you imagined.