Tim Carter, longtime area bankers and current president of the North Texas region for Southside Bank, is stepping down from his current position on Sept. 29.
Carter said he will continue to serve on the bank’s board and will continue as a liaison to the North Texas community.
“It has been a great 10-year run working with a fabulous team of bankers at OmniAmerican and now Southside for the last two and one-half years,” he said in an email.
Southside Bank acquired Fort Worth-based OmniAmerican Bank in 2010. OmniAmerican was previously a credit union that began serving employees of the nearby then-Carswell Air Force Base. It coverted to bank charter in 2006. OmniAmerican’s longtime leader, Larry Duckworth, died in early 2007 and Carter was brought on board later that year. Carter had previously been head of Chase Bank in Fort Worth and United Way of Tarrant County.
Mark Drennan, who joined Southside Bank as executive vice president, commercial lending for the North Texas region earlier this year, will become president of the North Texas region for Southside, effective Sept. 30.
Southside Bancshares, Inc. is a bank holding company with approximately $5.58 billion in assets as of June 30, 2017, that owns 100% of Southside Bank..
In June, Tyler-based Southside Bancshares Inc., Nasdaq:SBSI, parent company of Southside Bank announced it was merging with Diboll State Bancshares Inc., the holding company for Diboll, Texas-based First Bank & Trust East Texas, creating a bank with nearly $ 7 billion in assets.
The merger is expected to be complete in the fourth quarter.
The combined entity will operate under the names Southside Bancshares, Inc. and Southside Bank.
Carter is the second longtime area banker to announce his retirement this month. Longtime Dallas-Fort Worth banking and community leader John Gavin, currently community region bank president for Well Fargo, announced his retirement at the end of the month on Sept. 12.
The Fort Worth Business Press spoke with Carter following the announcement.
WHY NOW?
It’s the right time. I came to the bank in ’07. The bank was a troubled bank. We did a lot of work here on what I call blocking and tackling and worked with regulators and got the bank working smoothly and did the public offering. And that was new to me – SEC and going to New York and meeting investors. And then we had some people that wanted to come in and buy us, but they wanted my team to stay and help them on the transition.
Southside was in this market but in kind of a small way. We agreed to stay and I thought that be the best thing for all the employees, for the bank and for what we did in Fort Worth. I’ve really enjoyed it but we’re kind of done with the transition of the merger. We’re operating well; the bank’s announced another acquisition in East Texas so I kind of raised my hand and said, “Is there something we could do a little bit differently?” They were great to say, “Yeah, why don’t we do that? Why don’t you stay associated with the bank? Why don’t you stay on the bank board, and you could help us be a liaison here at Fort Worth.”
It’s just time for me. After 10 years, it was kind of, “What am I going to do?” I’m not looking to go into business. I’m involved in some non-profits and some other things. I just want to see what it’s like, if I go stir crazy or not.
I’ve talked to talked about 10 or 12 people who either retired or have seen that and I kind of picked their brains about what you know. I know I can’t tell what it’s like. If you’re a banker you’re active every day you’re making a lot of decisions every day. So, this will be a little different. I want to try to take on nothing new for four to six months and see if it drives me nuts.
WHAT ABOUT MARK DRENNAN, YOUR REPLACEMENT?
Great guy. I met him about a year and a half ago and I almost immediately said retire or step down, he’s the guy. O we got to know one another. He’s been in Fort Worth. His wife works for a large company here – Alcon. He’s been involved in all aspects of banking. His mentor was [long-time local banker] Charlie Powell, whose been very involved in this town, so he kind of taught him what it’s like to be a banker. To me, he’s going to be a great successor because it’s important for me that Southside stay as involved as we are, and he’s going to do that. He’s the guy that can interface with the community.
IN INVOLVEMENT BY BANKING OFFICIALS CHANGING?
I see it as a real challenge. When I came here in ’92, we had a lot more staffing in the bank. … It was encouraged to be out and help the community. That’s what a lot of businesses do. They still try to do that, but the staffing is not there. Everybody runs lean and mean. I just think it’s more difficult to find the time to go out there and do that. And then even budgets – in terms of contribution budgets – are lean and mean.
I think it’s the time. Everybody seems to be doing two or three jobs everywhere I go. I’ve seen a lot of organizations here in town that have started young leaders’ programs. I think that’s great, but the company’s got to give them time to actually get out there and do that or they can only pick one or two things.
BUT SHOULD IT BE A PRIORITY, PART OF THE EVALUATION?
Right. Not being under pressure, saying why are you spending time outside of the company to go to go do that. But I think this town is a little different in terms of, you know, [organizations like] Leadership Fort Worth. In terms of the history of this town, I think I it will always be there, but you don’t you don’t see the time commitments that can be there to lead that. When I went public, I had to really reduce the number of commitments I had and, you know me, I love being part. I’ve loved using the finance and the business acumen that you see being a banker to help nonprofits because they don’t they don’t have that. And to me that was – I call it the juice you know – but it’s hard to get the time to do it.
WHAT MAJOR CHANGES IN BANKING HAVE YOU SEE SINCE YOU ARRIVED?
The ’80s was when everything fell apart in terms of Fort Worth National, First City Bank. Banking was really on its head. This town had been two major banks from what I had learned of history. Some other banks were around. Great, great community banks. They became part of much larger organizations – Interfirst, First Republic – and then all those organizations went to nothing. The FDIC came in. A lot of bankers went away. The power the banks had in terms of helping was reduced significantly. You had new players come into town … but they were nationals – very, very big national banks. It’s just a different a different story. What’s happened since then is a lot of smaller banks have grown up. There’s been some other banks – out-of-state banks – that have come in. I still think bankers do a lot in terms of helping a lot in the community …
SHORT-TERM, MID-TERM ON REGULATORY CHANGE?
When I came here in ’07, by ’09 we’re going through what the economy was going through. We had a very large mortgage portfolio. It was about $400 million. We didn’t do any of those stupid loans that the very large banks did that they sold and they packaged up and sold them to people, securitized them. Most of the community banks didn’t have anything to do with that. We never had any big losses on the mortgage. We had indirect auto portfolio which means you’re competing to put loans on when people are at dealerships. We had what we called A, B, C, and D paper. D paper is subprime. We always kept a lid on what we did on that. We still checked every one of these customers out when very large organizations went out and just willy-nilly put on everything they could put
When everything went down, should things have changed? Yes. Normally what happens when you have a crisis like that and then Congress gets involved, they take it to the nth degree to say, “We’re really going to stop this.” Then it goes to all the bureaucracies to say, “Write the rules.” They’ve been there forever. They’re going to be there forever. They write rules and say, “Our regulators now, this is what you’re going to do.”
It just went way past the norm when the rules were written. It took three or four years to even get the rules out. I called them. There was a big difference in too big to fail banks and community banks. I am worried about too big to fail banks and whether the Glass-Steagall Act should come back because the power that’s there can run over everything. Community banks here in this town didn’t cause any of the financial problem, but we got swept along right with it.
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ARE COMMUNITY AND MID-SIZED BANKS THE SOLUTION?
I think they are. The problem is that all of this compliance and all of the exams and all of the different rules that have come in, banks our size¬ – we’re still a community bank, and we’re not a regional. … You’ve got to employ a lot of people internally to keep up with that, to help write policies and procedures and to have monthly testing. A lot of smaller banks don’t have the ability to make that happen. The big banks, yes, but the smaller banks? That’s why you’re going to be seeing smaller banks might be selling to get to a decent size to be able to afford that.
Regulatory relief, when Trump was elected everybody said it’s coming. You got a bump in all the banks stocks. Nothing’s happened. If they did do relief in the next six or eight months, it’ll take years before the bureaucracy that helps write the new rules puts it into effect. Most of the examiners have to deal with the past rules, not what they think the future. Do I think it’s going to be any time soon? No.
HOW SHOULD NEWCOMERS APPROACH LIVING IN FORT WORTH?
There’s two ways to go. You can live in this town and do all the fun things and everything that Fort Worth has become, or you can say I want to get involved somehow. You can get involved through volunteering at a church or a place of worship, but if you’re in business, you can either go to your bosses and say, “What is the company involved in? Can I help out?” You can go to Leadership Fort Worth – you apply, you can get in, you meet people. I think that’s a great organization. Then there’s also several organizations. Lena Pope – I’m on the board at Liam Pope – we have a young people’s part of that that’s trying to help. How do you get involved? What do you do? There’s several other organizations that have that. That’s what they need to do. They need to reach out. When I first moved to Fort Worth, people just approached me and said, “Could you help us do this or that or the other?” It was very easy. I forgot what age I was then, but younger people now need to reach out and find an organization like Leadership or an organization that has young people’s deals in them.
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WHAT ROLE CAN BANKS PLAY IN AN ENTREPRENEURIAL LANDSCAPE?
There’s kind of a capital source for everything. I think technology has made being an entrepreneur a lot easier. If you’re going to invent something, a drug or whatever, software, app writers, technology makes it much faster to get all that done. Entrepreneurs have always had a hard time getting their first loans. Most successful people have always done it either with some private capital, and then they’ve done it with friends and family. At some point, it needs to go to a bank where you can have banking services, treasury management. And it’s out fault, too. You got to get in front of people early and say, “You’re not bankable yet, but here’s how you become bankable. Let me come see you twice a year as this starts going along so that by the time you are, we’re ready to go.”
Almost every middle market company has a banking relationship. They might have initial capital. Banks aren’t really supposed to be involved in the initial capital. Back in the 1920s maybe. There’s too many regulations. You make a loan like that and the regulators come in and look at it and say, “We’re going to classify that loan as a potential problem.” Still, SBA [Small Business Administration] loans are a good source because it’s government subsidized, but it’s not easy to get an SBA loan. Getting to the initial capital, it has to be some other deal.
COMMUNITY DEVELOPMENT CORPORATION BANKS
When I moved here, there was an effort to put together the William Mann Community Development Corp. I became involved in that pretty quickly because it was city and banks and I had some previous political experience in Bellaire. The banks were getting together over at Texas Western with the community and William Mann to say, “Is there a way that we can bootstrap and put together an organization that the banks would invest money and this organization could put small loans out and make that happen?” The community development corporation is still here, but it hasn’t been able to crack the code just in terms of sheer volume of loans or able to get out there.
I think there’s some interesting efforts that you can do with that. That’s one of the good things – not everything about CRA [Community Reinvestment Act] is. It was needed back then because banks weren’t maybe doing the right things in some areas of the country. It’s like, “Wait, if you’re going to service this whole community, you service the whole community.” I don’t see anything wrong with that at all, and/or putting constituencies together. I remember John Hickey at Bank One. He was a great guy, new to town also. We were the chair and vice chairs of this group. We’ll compete all day long on a commercial loan, but you’ve got a pool of resources. That’s the difference back in the ’60s and maybe ’70s in Fort Worth.
HOW CAN BANKS BEST SERVE CUSTOMERS IN THIS COMMUNITY?
The biggest thing coming along right now is FinTech – financial technology that is competing with banks. That’s these banks or companies that you just do it all online. You don’t know anybody. You don’t see anybody. They don’t have any physical presence here in Fort Worth. They don’t do anything in the community. They don’t help at all. They might have cheaper product. Is that good for the community? It might be the cheapest for that person, but they’re doing nothing.
I don’t know if I’d name them, but there are a couple of banks that got billions and billions of dollars in the redo here that don’t have any physical presence and pay higher on CDs and then these other FinTech banks. They don’t have to look and say what Community Reinvestment Act? We take that seriously. They don’t have to do any of that. They just want to come in and compete. Just like Amazon has revolutionized retail, this is going to have a lot of impacts. We have to evolve, but people, I think, still want to know a banker.
You’ve got to keep up with the technology to be able to provide people a way to get to the bank by not having to come to the bank. Some people still like to come to the bank, and they always will. You’ve got to have the technology. You got to train the bankers to be able to talk to people and try to help them with what their needs are. I don’t call it selling somebody. I call it just getting to know them enough to what products and things will they might need.
You got to have enough people in the branches. You’ve got to have enough people who are trained to be able to do that. There’s so much compliance work that you have to do in terms of training that it’s difficult to get the time to keep people trained up in terms of financial services because compliance has become this gigantic overhang over everything we do.
The best think I tell people to do is know a banker. That means going in there and saying, “I’d like to have a personal banker, whatever, that I can call.” I still think it’s important. You might not call them but twice a year, but call them. Otherwise, you’re going to call a 1-800 number or you’re going to get over a call center in India. That’s not the same thing.
People still yearn for a conversation. Everybody says millennials don’t want to come to the bank. Well, they do, when they want to buy a car or they want to buy a house, or they want to figure out how to get out of their parents’ house and kind of get a game plan, they want to come in and talk to somebody, but they don’t know anybody. We’ve got to do a better job of reaching out, but not making it a sales call. Then wait for them to say, “You know what, I do need a financial institution.”