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MBT Financial Corporation (NASD: MBTF) |
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CEOCFO CEOCFO Monthly Analyst |
"To print this page go to file and left click on print" With a strong capital base and large
market share MBT Financial is now ready to grow their footprint geographically Bio of CEO, Mr. LaBeau was hired as Vice President in charge of
lending, business development and customer relations in MB&T’s south county area,
where he focused on cultivating new loans, trust accounts and deposits. In 1998 he was
named Executive Vice President & Senior Loan Officer responsible for all of MB&T
lending operations and business development including commercial loans, installment loans,
mortgages, bank card, commercial leases, collections and credit analysis. Mr. LaBeau was appointed to Chief Executive Officer
in 1998 where he assumed full responsibility for the bank. He was concurrently
appointed to the MB&T Board of Directors. Prior to joining the Monroe Bank & Trust team, Ron served as Interim Director of Development for St. Mary Catholic Central High School and Community President of First of America, Southeast Michigan. Mr. LaBeau holds an MBA from Eastern Michigan
University and a BA from the University of Michigan. Mr. LaBeau’s greatest professional
accomplishment is becoming Chief Executive Officer of a true community bank. Being
part of a rock-solid financial institution that has built its success on serving the local
community is very important to him. CEOCFOinterviews: Mr.
LaBeau, where was MBT Financial when you became its CEO and what changes did you
orchestrate? Mr. LaBeau: “There
have been large changes in a few different areas. The technology in the bank has changed
considerably; we made an investment in excess of three million dollars ($3,000,000) in the
last four years to upgrade our technological abilities. The main reason that we tried to
do that was because I perceived a need to communicate better and offer more availability
to our customer base with regard to their interaction with the bank. I think a Community
Bank needs to have this availability in order to service that part of the population who
is more technically oriented. CEOCFOinterviews: Are there any products that you would like to add that you don’t currently offer? Mr. LaBeau: “We are looking at the possibility of offering a third party stock and bond type offering, more or less a retail brokerage type of a thing. I don’t know if that would be anything other than something that we would offer as a defensive posture and a place for some people that might have smaller amounts of money. Rather than put them into a trust where there are all kinds of fees we might be able to move them into the kind of atmosphere, where we would handle their investment needs without having them incur the expense that would go hand-in-hand with setting up a full-blown trust arrangement. We would tailor it to meet the needs of some of the customers who might have less in the way of dollars to invest, someone who may be retired but wants to structure something where he or she can get more of a return. We are looking at an investment type product and, we will make a decision on that in the first quarter or first half of this year.” CEOCFOinterviews: Please tell us about the economy in the geographic area that you serve. Mr. LaBeau:
“Interestingly enough, Monroe County is just outside of Toledo, Ohio, and between Ann
Arbor and Detroit, (MI); so we are kind of a ‘sandwich community’ if you want to
call it that. At one time, because of the predominance of the automobile industry, we were
a ‘blue collar’ community with a number of people with very high-paying jobs in
the automotive industry; all of that character and flavor has changed. I grew up here,
went away to school for awhile, then came back and got a job in the financial sector
and have been here for thirty-five years; I have been watching this happen and it is
amazing to me. I think the tenure of the community has changed from a blue collar
orientation to a white collar higher educated workforce. The reason for that is because of
the availability of freeways that are here. Our workforce can now access freeways North
and South, and East to West, and work in Ann Arbor, Detroit, and Toledo. CEOCFOinterviews: How important is the 143 year-old history of the bank, in new customers and generating business? Mr. LaBeau: “I think that it is less important in today’s customer considerations than it was in the past. We are very proud of the fact that we have been able to maintain a charter that long, but it’s less important as time goes on. You have to deliver; you must have the right product offerings and service levels. If you don’t you are not going to be able to attract and keep the higher-educated customers that are moving into our County.” CEOCFOinterviews: How large is your market share? Mr. LaBeau: “We have about a sixty-two percent market share in the last numbers that I saw and that is controlled deposit dollars attributable to Monroe County. We have a far-ranging base of outside branches in the County. We have branches along the South, East, West and Northern fringes. We have twenty-two branches in the Monroe County area, as well as thirty-three ATMs, so we have the County well blanketed. That helps and so does the length of time that we have been able to serve this community. I think those two factors are the reason we have been able to maintain that healthy of a share.” CEOCFOinterviews: How do you motivate and train your people, and get a personal touch in a company as large as yours? Mr. LaBeau: “We have just added some training classes and have recently hired a trainer that will deal with those issues. Given the large share of the market that we have cross selling and hard selling are things that we probably would never implement, because I don’t think many customers like that; they are always being beleaguered at different branch levels. What we will be doing here is ‘softer selling’ in our branch system. The key is to get people and train them. I found that it is important to do a lot of that in-house. Also, we offer a college reimbursement program for all of our employees. Because of the proximity of a very good community college, as well as the University of Toledo, Eastern Michigan, and University of Michigan several college classes are offered in town. We urge our employees to take advantage of those classes and educate themselves more. I think that, and the ability to offer them classes in-house to keep their intellectual curiosity going as well as help them improve their ability to service customers is vital to us.” CEOCFOinterviews: What is the break down between consumer and commercial customers? Mr. LaBeau: “The
mix is changing just slightly because of who we are. We will deal with a smaller
commercial customer where a lot of our larger brethren, although they have been very
successful, really distain that part of the market. Being able to deal with a smaller
commercial customer is our ‘meat and potatoes.’ When I define small I would say
about $2,000,000 and under as far as a loan goes. We have a large percent of borrowers
that we are able to service; many of these are people that we grew up with, so that gives
us a little advantage on some of our larger competitors. CEOCFOinterviews: What happens when that is over? Mr. LaBeau: “That is a very good question. I think at that time there will be more of a need to concentrate on the commercial area. However, if we lump in the consumer area with the mortgage availability, given the fact that people are still migrating into our County we will continue to be busy in this type of lending for awhile.” CEOCFOinterviews: How do you plan for these types of interest rate changes? Mr. LaBeau: “There
is no way to plan for that. I have been around banking long enough, where I went through
the times of ‘81, ‘73, ‘74, when interest rates were just the opposite of
what they are now. As tough as that was, this is so prolonged and severe that it is
difficult to manage in this environment as well; you can’t plan for anything like
that and the only thing you can do is try to react to it when it occurs. We have reacted
to that. When your margin is getting ‘pinched’, there is no such thing as a
fixed loan; you have to be flexible and re-price most of your asset side, your commercial
lending , as an example, or you are going to lose the deal. CEOCFOinterviews: Will you tell us about your trust department, because you certainly have a large one? Mr. LaBeau: “It is an area that is in ‘flux’ and in growth. There is compression in the market; we are just a touch under a billion in assets. We had tremendous growth in management, and we have probably doubled the size of the trust area. It is an area that we have added some technology and offered some employee benefit programs. Through the computer or the phone, people can find out what their balances in their retirement accounts are and they can reallocate their mix. This is an area that we are continuing to look at and trying to enhance what we do there for people. It has been difficult with the stock market over the last three years as far as our ability to keep people happy.” CEOCFOinterviews: Will
you tell us about your community involvement? CEOCFOinterviews: Do you do much advertising? Mr. LaBeau: “Oh yes! We have continual advertising streams. We have the local paper, and several other smaller community papers in which we advertise. We do billboard advertising and advertise on some local radios. We do a little bit of advertising on WJR, which is the largest station in the Detroit and Midwest area. We recently made a decision to move into the Down River area, which is just South of Detroit. In that area, we will be doing advertising in different newspapers and billboards. We started that particular strategic move in July. The reason we made the decision to go that way is that there are well over 300 thousand households in an area that is probably a tenth the size of our County. The thought process is that there is a need for community banking there. Wyandotte Charter National Bank of Wyandotte was the last community bank there and it just sold in February (2002). We felt that there was an opportunity for a community bank to go there and service some of the people who have needs that larger banks don’t target.” CEOCFOinterviews: Have you opened new branches or will you be opening branches? Mr. LaBeau: “Yes, we have a loan production and a trust office opened now. We have pending offers on two other sites. I am hoping that by this time next year we will have at least three retail sites as well as construction under way for a mini main office in the Down River area for commercial lending, mortgage lending and trust business, we are well on our way to making that happen in 2003.” CEOCFOinterviews: Are there other community banks in the Monroe area and why are people choosing you? Mr. LaBeau: There is one other Community Bank, United Bank & Trust that has one office in our County. People choose us because of the convenience and the fact that we have the ‘Brick and Mortar’ out there and have had it for a number of years. Our ATM positioning is sound. We have our people out-and-about. Most of our folks are still people that have roots in Monroe and, because they have roots here, people want to deal with people they know.” CEOCFOinterviews: How do you keep in touch with the customer service rep on the front-line, and may get a feel for what the customer wants well before you might? Mr. LaBeau: “When I was working in a smaller organization it was much easier. Now with twenty-three sites it is a lot more difficult to keep your finger on the pulse. I find I have to rely much more on the people who are in charge of the operations here, the HR department, for example. I try to get around to visit all the branch sites, albeit it is very difficult to do when they are spread all over the County. But I make an effort to do that. Most people at the branch level feel free to pick up the phone and call me directly. We are still at a size where it is kind of nice to be able to do that. I just rely on the people we put in charge in those areas.” CEOCFOinterviews: How do you do in the way of non-performing loans compared to your competitors? Mr. LaBeau: “We are much higher than we should be. We are addressing that issue and we have aggressively set aside money in our Loan Loss reserve. I am hoping that by the end of this year many of these problems will be behind us. Most of these loans are secured by real estate, which takes more time to market in order to reduce our NPA number. The economy is poor all over. Some people are having problems that never have had any problems in the past. We keep our eye on that and make sure that we are adequately reserved and have identified all of the problem loans in our portfolio. We have a very active loan review segment, which was not part of this bank until two years ago. We work very closely with the loan review to identify and grade all of our loans.” CEOCFOinterviews: What would you say to shareholders and potential investors; why should they be interested in your company? Mr. LaBeau: “I
think we are a very good buy for investors given the price of our stock. If you are
looking at us priced to book, we are handsomely priced. If you are looking at us as a
potential investment with growth possibilities, I think that is also going to happen.
I say that because we have just instituted the new strategic plan to grow our
footprint geographically. My feeling is that we would be unable to grow much more in our
County than we already have. The main issue is where do you grow and that is precisely why
we looked at the Downriver area as an opportunity CEOCFOinterviews: Going forward, what should we look for? Mr. LaBeau: “I think, going forward, there are three things that are important for us; number one to continue to fight to keep our foothold in the County; Number two, to continue to look for investment opportunities; and finally to react to competitors. Hopefully, we will be successful in these endeavors.” disclaimers |
