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The Capital Imperative

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, it all seems so reasonable and logical to the organizers. Here are some of the perceptions and realities that Bankmark has observed which may help to put some common issues into clear focus.

The general perception according to the organizing group read like this:

The general perception according to the organizing group read like this:

  • Perception: The community needs a local bank to fill a void in the marketplace

  • Perception: We organizers are successful individuals

  • Perception: Our success is directly transferable to a capital program

  • Perception: The economy is recovering, so this is an ideal time for a new bank

  • Perception: We will all pull together and share the work load equally

  • Perception: We are well connected and respected within our sphere of influence

  • Perception: We only need to raise XX$, that can't be that hard

  • Perception: Most folks will honor their non-binding stock agreements

  • Perception: I make the contract, the President goes by and picks up the check

The general realities according to the community read like this:

  • Reality: Yes, a community bank would be nice, but...

  • Reality: Yes, we like and respect some of the organizers

  • Reality: Yes, it sounds like a good idea, but aren't there a lot of changes going on in the banking industry?

  • Reality: I'll think it over, get back to me in a month or so

  • Reality: I spoke with my "advisor" and he/she said banks are a weak investment

  • Reality: I think I know what's in it for you, but what's in it for me?

The actual realities according to Bankmark's experience read like this:

  • Reality: Only 8 - 10% of those you contact, buy (20% would be a best case)

  • Reality: 60% of those who do invest, are people the group has not met yet

  • Reality: Less than 50% of the organizing group can be counted upon to produce

  • Reality: Less than 35% of the people signing non-binding agreements follow with a check

  • Reality: No matter what anybody tells you, there is never enough time and it always turns out to be a tougher job than you imagined

Bankmark's Capital Acquisition Program is designed to help organizing groups deal effectively with both the perceptions and the realities in today's capital marketplace. True success only occurs when preparation meets opportunity.

Read more: Find out what Bankmark's Clients are Saying (Page 2)