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Working for the success of their
shareholders, customers, team members and communities, State Bank Corp.
wants everyone to win
Financial
Community Banks
(SBAZ-OTC: BB)
State Bank Corp.
Mohave State Bank
1771 McCulloch Blv.
Lake Havasu City, AZ 86403
Phone: (928) 855-0000
Ralph Tapscott
Chief Executive Officer
Interview conducted by:
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
Published - April 27, 2007
BIO:
Ralph Tapscott is a 20-year banking veteran that began his career with a $50
million community bank in El Paso, Texas. He later transferred or began
working for United New Mexico Bank, a $1 billion community bank
headquartered in Albuquerque, New Mexico. This career move offered him lots
of opportunity for advancement, and even more so after Norwest Corporation
acquired United New Mexico Bank. Ralph has held a variety of commercial
credit positions including senior credit officer. He was later promoted to a
community bank president position, and stayed with the company through the
Wells Fargo & Company integration; which allowed him the opportunity to move
to Lake Havasu City, Arizona. Ralph was later recruited by Mohave State Bank
to provide succession for their retiring CEO. Ralph has been the CEO of
Mohave State Bank for the past five years. He has been the CEO of the
parent, holding company, State Bank Corp., since its inception three years
ago.
Ralph received
his undergraduate degree from Texas Tech University and attended graduate
classes at the University of Texas at El Paso. He is also an honors graduate
of Pacific Coast Banking School. Ralph is very active in civic, community
and industry volunteering and leadership. He is a two-time past Rotary Club
president, is the chairman of the Arizona Bankers Association, chairman of
the Lake Havasu Area Chamber of Commerce, and a board member of the Western
Independent Bankers Association.
Company
Profile:
Mohave State Bank is a full-service, community bank providing deposit and
loan products, and convenient on-line banking to individuals, businesses and
professionals. Mohave State Bank was established in October 1991, in Lake
Havasu City. The Bank has four convenient locations throughout Mohave
County, a branch under construction in Kingman and a loan production office
in Yuma, Arizona.
CEOCFO: Mr. Tapscott, what was your vision
when you became CEO of State Bank Corp., and where are you today?
Mr. Tapscott:
“My vision was to expand the bank and to remain independent. We are a
community bank in vibrant growing markets. However, our initial term of
growth was probably slow like our communities were at that time. When I
joined the bank we had a little over fifty employees, and I could see us
growing to a point where we could provide people a real chance for
advancement within this organization. Today we are close to 90 employees, we
have a long-term vision of in-excess of 250 employees, and it is encouraging
to be able to see people shift and grow within our company.”
CEOCFO:
What is the economy like in the area you service?
Mr. Tapscott:
“We are in an interesting area, predominantly in the three major cities
within Mohave County, with our headquarters in Lake Havasu City. We are
executing on a geographic expansion in Yuma, Arizona. The three major cities
within Mohave County are Lake Havasu City, Bullhead City and Kingman. They
are all quite unique. Lake Havasu City is often considered a retirement
community and to some degree, it is. I see more people opt for a
semi-retirement mode and it is vastly different than it was a decade ago.
Tourism has been our major draw, and we do have the highest concentration of
high-end custom boat builders in the country. Although also somewhat of a
retirement community, Bullhead City is very much a feeder for the employment
of the casinos and hospitality of Laughlin, Nevada. Many residents live in
Laughlin, Nevada to escape state income tax. Kingman on the other hand has a
very diverse economic base; it is an interstate city and sits on I-40. It
has great rail distribution and there is a vibrant air-industrial park.
Kingman is in the middle between Phoenix and Las Vegas, and it seems to be
catching a lot of attention from both of these metropolitan areas. They are
in the midst of building the Hoover Dam bypass, which will cut down travel
time to Vegas by about 30 minutes. Several years ago, we began focusing on,
what we call, our quality growth imperative. It is nothing more than a
mathematical equation that reflects how much balance sheet growth we need to
continue providing the expected shareholder returns. Ours is quite high, and
this is largely due to shareholders becoming accustomed to a 20% annual
return on their investment. Our quality growth imperative was reflecting
that within five years we would need to provide annual growth in excess of
$100 million. It became very obvious that we would need to expand
geographically. Therefore, we began a geographic search, predominantly in
Arizona, and identified the Yuma market as a under-banked market primed for
a new community bank expansion. We are focusing a lot of effort executing on
the Yuma expansion strategy. It is an interesting market, we’ve looked at a
lot of analytics, kicked the dust, identified our leadership, and now we’re
moving forward."
CEOCFO:
Why are people coming to Mohave State Bank?
Mr. Tapscott:
“People come to Mohave State Bank, because we have a fifteen-year track
record of consistency, conservatism, and a strong belief in the small
business community and our communities as a whole. We hire good people, give
them lots of authority, we pay them well and they gain the trust of their
customers.”
CEOCFO:
How do you split between business and consumer and would you like to see a
change?
Mr. Tapscott:
“Later in our life we are going to have to change. Our niche has essentially
remained the same since the bank was formed. We are currently expanding this
niche only slightly. We believe in, what Jim Collins refers to in Good to
Great as, the hedgehog concept. The concept is to, ‘stick to what you
know and stick to what you are good at’. A large consumer market for a bank
our size isn’t necessary and frankly what we are looking for. We don’t have
the facilities and staffing to support this model. We are the beneficiary of
some technology that will allow us to expand into larger, middle market
business and some small municipal business. We will also place added focus
on banking the executives and management of the companies we bank. This
should provide us with plenty of opportunity for the next handful of years.”
CEOCFO:
Please tell us about your community involvement for the bank!
Mr. Tapscott:
“This is truly an area where we shine. If you looked at our 2006 annual
report, the front and back covers are plastered with a variety of civic and
charitable organizations that our bank has supported financially. However,
financially it is easy to write a check, but I’m more proud of our
management team’s commitment to get involved at the leadership level. I had
a mentor early in my career that told me that my quality of life and the
quality of the company or division I ran would only be as strong as the
community I was in, and that it was my job to make the community better and
stronger. This concept is key to the vision of Mohave State Bank. When you
live in a small community, it is a lot easier for you to get in, get
involved, roll up your sleeves, and make a difference. If you look at our
ranks of management, you will find more presidents and past presidents or
members of Rotary, you will find the largest contributions and campaigns for
United Way. You will see huge numbers of walkers for March of Dimes; you
will see Kiwanis, economic development authorities and members on hospital
boards. I am very proud to say that of any company in Mohave County, you
will find more leaders within our company than any company out there and
much more than any bank. It absolutely chafes my hide when I find that the
other banks give back so little.”
CEOCFO:
What is ahead for 2007?
Mr. Tapscott:
“I wish I had a brighter picture for our industry, but the writing on the
wall indicates a very tough environment. The FDIC has stated that this is
the toughest environment we have seen since 1989. It is difficult to find a
stock analyst today that is saying to overweight the financial sector. Add
to that the recent problems in the sub-prime market. We are all seeing
margin compression, non-bank competition, rising costs of operation, macro
credit concerns associated with the economy, and our industry is becoming
commoditized. I believe all of these pressures will result in some of the
less strong banks being sold in 2007.”
CEOCFO:
What do you do at Mohave to overcome this type of climate?
Mr. Tapscott:
“We are looking at what we can do different with our demographics. We are
focusing more on commercial and industrial lending. We realize the true
meaning of low cost funding, and we have a hard push on our growth in demand
deposit or checking accounts. It is an inexpensive source of funding and all
people want good execution and great service.”
CEOCFO:
With regard to the industry in general; how do you counteract the recent
setbacks?
Mr. Tapscott:
“One of the things is to become politically active. Years back in my career
I was not so politically active and somehow just believed that other people
would carry this torch. At this point, I strongly encourage my peers to
truly, actively get involved. If we look at some of the major issues we are
battling right now; we have been battling credit unions for years, we can’t
give up the fight. Farm Credit Services is now pushing to expand its
charter, and this will allow them to operate in much larger communities with
absolutely no ties to farming or agriculture. Fighting over non-agriculture
related business with a tax advantaged GSE is just not fair, so we have got
to get on the political side. I encourage people to get to know their
legislators and get involved in industry associations.”
CEOCFO:
Why should investors be interested in Mohave State Bank?
Mr. Tapscott:
“One thing investors appreciate most about an organization is consistency.
When you look at our track record, whether you want to take growth in the
balance sheet or growth in earnings, relative measures of earnings, capital
positions, bank ratings; they have been consistent and superior to peers for
almost a decade. We offer consistency in our leadership, focus and our
niche. The historical returns are pretty impressive, and these are generated
with minimal risk.”
CEOCFO:
Is reaching investors a focus for you?
Mr. Tapscott:
“It is becoming more of a focus each day. Our bank, like most community
banks came out of the gate and sold the stock within the local community.
Investors appreciated their relationship with their bankers. If that
investor was sixty when he made his initial investment, we are a fifteen
year-old company, that individual is now seventy-five years old. Life throws
changes at you and those life changes require you more and more to rely on
the investment community to become your partners in success.”
CEOCFO:
What would you say is your daily focus as CEO?
Mr. Tapscott:
“Work and grow your people. Your time becomes their time. It is funny, when
I came out of college, I probably didn’t have the best GPA. I said I would
never become a banker; low and behold, I became a credit analyst, and here I
am 21 years later running a bank. This is the analogy that I give to people.
On my fourth day of working for a bank, they came up to me and gave me the
key to the bank and the alarm code. On the fifth day in the bank I began
making the coffee; I was the first one in and the last to leave. Twenty-one
years later I find myself in that same situation. The majority of your day
is dedicated to your people; you have certain strategic initiatives that you
need to execute, often times this gets done early in the morning or late in
the evening.”
CEOCFO:
What should people remember most about State Bank Corp and Mohave State
Bank?
Mr. Tapscott:
“We are not successful unless you are successful and that goes key with our
mission statement. We are working for the success of our shareholders,
customers, our team members and our community. We want everybody to win.
Shareholders have become accustomed to 20% annual return on their money over
the long-run; actually 22% since the bank’s inception and that is not a bad
run.
You know the adage “you have to give to receive”. We give our best everyday
- to our shareholders, our customer, our team members, and our communities.
In return, they have blessed us with the ability to keep this great company
independent and healthy. We count our blessing regularly and we take nothing
for granted. We are only as strong as our constituents are collectively.”
disclaimers
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