For those who've wondered what kind of bank a group of company builders would build for themselves, we now have an answer. It would have no branch locations, and no walk-up windows even at the single office it would operate. It would bring banking to your door. And it would grow like hell.
That, anyway, is the sort of bank -- and apparently the sort of success -- a dozen entrepreneurs have created.
By the time First Business Bank of Arizona opened in 1985, its 13 directors had raised $4.5 million from 200 shareholders (without help from investment bankers, who were "too expensive"). They had leased space for he bank in what director Joseph McCabe, senior partner in McCabe & Pietzsch, dubs "the best corner" in mid-town Phoenix. And they had hired a real live banker -- Jack Wertheim, a former senior vice-president at AmeriTrust Bank, Cleveland -- to operate it.
Nine months later, the bank was profitable. Thirty months later, the bank's startup capital has rocketed ninefold into an asset base of some $40 million, already placing 22d on the most recent ranking of Arizona's 52 banks.
First Business's sexiest attribute? Probably its justly celebrated "house call" mentality. As mentioned, the bank has no branches and doesn't encourage walk-in business. Instead, its bonded couriers conduct daily banking transactions by traveling door-to-door, saving clients their scarcest resource -- time.
It is ironic, of course, that a tiny bank is adding free, labor-intensive services while its behemoth competitors, which wail about mounting losses, heap increasing fees on the most marginal of transactions. Ironic, but not mystical. "We have no investment in brick and mortar," explains Wertheim. "With the courier service -- and without the retail customer -- we don't need all those branches."
Lest you think, however, that starting a bank is as easy, say, as starting a business, entrepreneur beware. The experience, however successful, has sobered Arizona's hip shooters. According to Wertheim, his directors have been more conservative than his bankers on some loan decisions. "Banking is harder than I thought," explains Harvey Klein, who cofounded Southwest Auto Auction Inc.
Donald G. Jones, a cable-television entrepreneur, points out that margins are modest, competition keen, and regulations weighty. You have to go by the book, he says, "and can ill afford to do things wrong." Not exactly the stuff of new-age entrepreneur-speak, which is usually about creative boldness and learning from mistakes.
"I've learned," sums up First Business chairman Russell Williams, "that bankers earn their pay."