June 26, 2024
With liquidity still a number one concern for credit unions and community banks, and no immediate ease expected from the Fed, the batons remain hatched for many financial institutions… But should they? One banking leader believes there’s always opportunity in adversity—and has the track record to prove it.
The Great Recession left the financial services industry reeling. Consumer confidence was at an all-time low, regulation was gearing up for an all-time high (including, among a slew of state and federal initiatives, the introduction of the Consumer Financial Protection Bureau), the Healthcare Reform Act was rewriting the rulebook for employee benefits; and neobanks and novel fintech were capitalizing on all fronts—disrupting the market and consumer behaviors in truly seismic ways. Anyone would be forgiven for thinking this was a catastrophic period to launch a bank, but Jeff Kesler of Veritex Community Bank disagrees.
Opportunity in Adversity
“A lot of times, banks are really built to be sold at a certain asset size, that was certainly the case for a number of banks in Texas at around that time,” says Kesler, president of Dallas/Fort Worth for the bank.
“The leadership team, capital and equity base at a number of those financial institutions had really become fatigued through the great recession, so this was actually an incredible opportunity to take new capital and inject it into those banks, and assimilate them together with a new vision, mission and culture. One focused on serving others and delivering a meaningful impact; a bank based on relationships, truth, integrity, and transparency.”
That new capital was secured by the bank’s founder, Malcolm Holland with Kesler coming on as the second employee of the founding four in 2009, as Veritex embarked on a journey of organic growth and strategic acquisitions.
Safeguarding the Organization’s Culture
Kesler admits Veritex was “Swimming upstream” in its infancy, but the new organization’s steadfast commitment to its culture of service and positive impact was an attractive prospect to consumers, potential partners and acquisitions alike.
“We saw an opportunity during that time of uncertainty to acquire healthy banks and expand our footprint, but the only way to do that successfully was to ensure our culture was never diluted,” Kesler adds. “Of course, we would intentionally listen and learn from the new talent we were bringing in, but our values and mission were, and are, non-negotiable.”
This focus on mission, vision and values has remained. Veritex has made a number of non-bank acquisitions since 2020 with the same focus paramount. “It doesn’t matter what the acquisition or expansion is. The stronger our culture, the more our people and multiple entities understand and embody it, the greater our impact on our customers. And that’s what we established the bank to deliver.”
Can Lightning Strike Twice?
For an organization born out of the Great Recession, that respectably weathered the global pandemic, perhaps it’s no surprise that Veritex was also well-positioned for growth when Silicon Valley Bank (SVB) unexpectedly failed in March 2023, with the world’s first digital run on a bank. And once again, it was the organization’s culture and commitment to service that secured its standing.
“We started an initiative midway through 2022 to balance our loan and deposit growth” adds Kesler. “We wanted to ensure we were on the front foot to provide a seamless onboarding and acquisition experience for our customers, because that’s what they expect. So we knew we had to put the time, energy and focus into it.
“We did the work and implemented strategic initiatives like Mantl, which connects us with our consumers wherever they may be digitally and physically. And so, come March 2023, we were in a strong place. We acquired more clients in that challenging environment than we had in prior years. And we were able to do that because we were committed to service and impact, and we invested in the technology to deliver that.”
Innovation is Necessary, but Values are Forever
With digital banking now a core focus for Veritex, the organization’s emphasis on culture has expanded to include potential fintech partners.
“I don’t believe banks or credit unions need to fear fintech. They’ve always offered innovative solutions—they wouldn’t exist if they didn’t—the real challenge is finding the partners that align with your institutional values,” says Kesler. “Through collaboration and continuous learning with our partners, we can provide the right options and opportunities for our consumers, and that’s mission critical. Find the partners that share your goals, your vision, and share in your success, and the rest will follow.”
Discover why LendKey is partnering with more than 400 credit unions and community banks to help them deliver their mission.