Technology Helps Puts De Novo on the Fast Track: The Bank of San Antonio
The Bank of San Antonio is on the fast track with growth that is nothing short of amazing. Since opening its doors for business on June 22, 2007, the bank's assets have mushroomed to more than $45 million by the end of October. The bank already has 25 customers using remote deposit capture, a figure that surpasses many banks offering remote depost capture for a year or more.
Brent Given, The Bank of San Antonio's president and CEO, had a clear vision for the de novo bank and understood how important technology would be to achieving that vision. Given also understood that he couldn't go it alone and needed a trusted partner to navigate through the selection of sophisticated technology solutions the bank would require.
Based on a recommendation from his CPA firm, Given contacted Austin, Texas-based Abound Resources, a technology advisory firm focused on helping community banks and credit unions make the right technology decisions.
"We knew we had to have the same or better technology as the big banks have," says Given. "I wanted to look at technology solutions that are in place at billion dollar banks. We wanted leading-edge products for our customers; we weren't going to be a typical community bank with second-tier technology and products."
Given and his team were not interested in implementing the types of systems typically found in a de novo institution because he anticipated the bank's rapid growth.
"I don't want to be slowed down by having to convert systems as we grow," says Given.
Unique De Novo
The bank offers both commercial and retail products, although its strategy is clearly skewed toward growing its commercial business. The bank lists capital lines of credit, acquisition and equipment financing, letters of credit, private client services, real estate financing, treasury management and personal banking among the commercial products and services it provides.
One of the bank's strengths is its depth of treasury management products and services. The bank offers accounts receivables and payables, wire transfer, positive pay, investment and loan sweeps, image lockbox and merchant credit card processing.
Given describes his target customer as a home-grown business with upwards of approximately $30 million in revenue. This customer would likely have a $2.5 million line of credit, equipment loans of $1 million and real estate loans of $1 million. The bank's strategy is to make the loans and then provide the customer with treasury management products and services that rival any of the nation's largest financial institutions.
Given hired a former Wells Fargo treasury management officer, Tom Moreno, to run the treasury management operations. Wells is known as having one of the strongest treasury management offerings in the industry, yet The Bank of San Antonio is on par with what Wells can offer, notes Moreno, senior vice president of Treasury Management and Corporate Solutions. "We have technology that is as good as any of the big banks," says Moreno. "We can offer everything they can offer and then round out those offerings with mortgage lending and wealth management."
For example, to provide its commercial customers with a full-range of banking services, The Bank of San Antonio offers the unique "Team Banking" product to serve customers' employees. Although the retail business is not the bank's focus, Team Banking provides employees of the bank's commercial customers with retail products such as checking and savings accounts.
One market segment The Bank of San Antonio aggressively targets is physician groups. The bank offers lockbox services that manage the complexities of health insurance such as providing explanations of benefits along with invoices.
Abound's De Novo Experience
One market segment The Bank of San Antonio aggressively targets is physician groups. The bank offers lockbox services that manage the complexities of health insurance such as providing explanations of benefits along with invoices.
Abound's experienced team of former bankers and technologists got right to work, creating a technology budget and providing the detailed information needed to apply for the charter. "It's a balancing act of providing regulators with information they require but at the same time not over-promising technology capabilities or limiting flexibility down the road", explains Brad Smith, Abound Resource's co-founder and president.
"Brent has built a great team who are very technology-savvy," adds Smith. "They have an aggressive vision and they are raising a lot of eyebrows."
Abound's responsibilities included developing the initial high-level requirements and a formal Request for Proposal (RFP) to encompass a full range of banking products, including core accounting, Internet banking, cash management, complex commercial lending and anti-fraud solutions.
Since cost is always an issue for community banks, Abound projected the costs of different vendor solutions based on the bank's expected growth.
What enabled Abound to successfully pare down the vendor selections to those solutions most well-suited to the unique needs of the bank is Abound's combination of de novo banking and technology expertise. The firm has conducted over 400 technology vendor evaluations for banks ranging in size from de novo to multi-billion dollar institutions. Abound analyzed and compared vendor responses, checked references, performed the needed due diligence and negotiated contracts. The entire project took only six months, allowing the bank to open its doors in record time. Given jokes that during this time he and the Abound team "were joined at the hip."
Savvy contract negotiations by Abound enabled the bank to receive terms and conditions that were more favorable, guarantees of ongoing quality service with the addition of SLAs, and approximately $500,000 in savings.
High Point
The Bank of San Antonio's location presented a unique technology challenge. Because their headquarters and operations center is housed in a building that sits on the highest point in San Antonio, the building is susceptible to lighting strikes that can damage equipment and cause unacceptable system downtime.
With Abound's help, the bank was able to engage a network provider that would outsource the bank's servers. Abound negotiated the contracts and service level agreements for this mission-critical technology.
"What helped make the project so successful was Given's clear definition of what he wanted for the bank", says Jimmy Cain, executive advisor with Abound Resources and the project manager. "We could focus on finding the technology that would do what his business was looking to do, which is to serve the needs of commercial clients."
The Bank of San Antonio continues its upward projectory, and Given believes that technology is the secret weapon that allows this community bank to compete against the biggest in the industry—and come up a winner.
