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Lynn Fosse, Senior Editor

Steve Alexander, Associate Editor

Bud Wayne, Marketing
& Production Manager

Christy Rivers - Editorial Associate



Efficiency Ratios and High Loan to Deposits Drives Growth for Stockmens Bank

Robert M. Alexander

Chairman, President & CEO

Stockmens Bank


Interview conducted by:

Bud Wayne, Editorial Executive

CEOCFO Magazine

Published – October 24, 2022

CEOCFO: Mr. Alexander, you personally have a long history in banking dating back to 1986. Would you also give us a little background and history of the bank and how it developed from its founding?

Mr. Alexander: In 2004, I got an unbelievable offer for a bank that I had, the First National Bank of Colorado Springs, so I sold that bank and was under a non-compete for three years. Then in 2007, I acquired a bank in western Nebraska. The reason I did that was because you needed to acquire a charter in the state of Colorado to open up any kind of branch or operation. However, with my Nebraska bank acquisition I was able to branch into Colorado. That was when I started Stockmens Bank, which we now operate in Colorado and Nebraska.

I personally started buying stock in First Home Bank in Missouri in 2006, and over the years accumulated enough stock to have representation on the board. If you Google First Home Bank, you will see they came as close as you can to failing without failing, coming out of the 2008 recession. They were strong advocates of having Stockmens acquire or merge with them and have my executive committee and I run those banks. There was quite a bit of back-and-forth. We finally got First Home Bank to the point where it was off a cease-and-desist order and relatively clean regulatory, so the merger was completed in 2017.

Stockmens Bank now has eight branches in Missouri, two in Colorado and one in Nebraska. When the merger took place, all of the banks in Colorado, Missouri and Nebraska operated under a Colorado State Charter. We are technically a Colorado bank, however there were some significant advantages to us for keeping the holding company headquartered in Missouri.

CEOCFO: The merger with First Home Bank of Mountain Grove, Missouri, what was the purpose? Was it simply for expansion, or was there another component, such as becoming a public company?

Mr. Alexander: At the time, I believed I knew how to fix the Missouri operation and wanted to execute on that plan. Think about it as a fix and flip but we did not flip; we fixed and kept. That is what I have done with all of my banks that I have acquired. I see opportunity if I can buy at a value and have a pretty good idea of how to fix it. Fortunately, that was the case with First Home.

Secondarily, Missouri for a lot of reasons, is a significantly better place to do business than Colorado. Unfortunately, in the last ten years or so Colorado has become somewhat business averse unless you are in certain businesses which the politicians here subscribe to. I like the business environment in Missouri much better. Further, because First Home had had so many troubled years, there was some deferred tax assets on their books that I did not want to jeopardize by moving the holding company.

These are in no particular order in terms of priority, but finally, I wanted to take our banks into a publicly traded platform. Up until that time it was kind of Rob’s bank, and selling the bank has never been even remotely part of our business plan. However, moving into the future the bank needed to be bigger than one person, and First Home allowed us to become publicly traded.

CEOCFO: Would you tell us about the industries you serve and which of the different industries provides the greatest revenue potential for your bank today?

Mr. Alexander: We do a lot of mid-market commercial lending and we do a lot of AG lending. We do have somewhat of a specialized consumer/retail platform in Colorado and Nebraska. We like equipment lending. We take care of our customers with car loans and home loans but really do not push that any further.

We have a system in place with our Missouri branches that resembles a more traditional retail bank and provides consumer and retail lending and deposit services on a more traditional and broader scale. Our other markets are a little more specialized. Overall, when you blend it all together, we have an exceptional level of non-concentration. We have been able to avoid concentrations as opposed to a majority of smaller community banks. One of the primary drivers behind our business plan is we stay away from loan concentrations.

We pretty much avoid speculative real estate and limit our exposure in construction lending. We also do not do a lot of investor real estate. Historically that has been the Achilles Heel of community banks.

CEOCFO: Would you tell us about the communities that you serve in Colorado, Nebraska and Missouri. Are they more rural or urban?

Mr. Alexander: The focus on staying away from concentrations is consistent throughout the organization and we are very deliberate on that. It is not just happenstance. If you go into some of our smaller market banks in Missouri and Nebraska, it is more of a community bank platform. There will be some AG and some mid-market commercial. We avoid speculative real estate or real estate speculators. It is a very nice consumer mix. You go into our larger markets like Springfield and Colorado Springs being our largest market and our branch there serves a huge geographic area. There is only one other bank in this market and that is a community independent bank, which is locally owned and controlled.

We tap into the longer-term historic Colorado Springs market. We are very well-known in the community and we do larger deals here for the most part. The same with Springfield.  Our country banks are operated a little bit different. That also keeps us well diversified and un-concentrated because we are not necessarily tied to the commodities market and small AG. We are not tied to traditional commercial markets like you would see in larger communities. The theme runs consistently through the operation.

CEOCFO: What is the management structure for the bank? Do you have leadership, such as a president for each branch, each region? How do you manage from state to state?

Mr. Alexander: The entire bank is run by what we call the executive committee with roughly eight members on that executive committee. We have our market president from Missouri on that committee and have the market president from Colorado on that committee. We have our CFO, our COO and our head of HR. We have our corporate secretary, and our senior credit officer. We have a senior credit officer for Colorado and we have a senior credit officer for Missouri. Think of it like the Knights of the Round Table, except I do Chair that committee.

CEOCFO: What advantages has FinTech provided?

Mr. Alexander: That is one of the best things we have going for us is the FinTech ebanking. It is great for the masses and it has been a boon for our bank and some other community banks. However, the bottom line is people who run businesses and run AG operations and sophisticated investors need banking services that are not at the cookie-cutter level but at the higher level.

The difference with Stockmens Bank is we still have people for them to talk to and that level of accountability. Whereas the large banks and the regionals and some of the larger community banks, they all want to be ebanks and eliminate employees. We are doing the opposite and thriving.   

CEOCFO: With the rise of online banking and mobile apps, is the personal touch still important for you and your customers or do you find with the newer generations that are in the workforce these things don’t matter as much?

Mr. Alexander: Personal touch is what our customers want. However, it is not just personal touch. What they want you can’t get with the big banks, which is personal accountability. If your loan is declined by most large banks the lending officer will just say, “sorry, my committee said no.” Or they may say the boss in New York said no or my regulator will not do it. There is just no personal accountability. If we decline a loan at Stockmens Bank, that customer has access to the top levels of management, and we tell them exactly why the loan is declined. If we make a mistake, we hold ourselves accountable and we have to make that right with the customer.

Frankly, what we provide is just what they cannot get anywhere else. You find out what they want and what they cannot get from the competition, and we provide it in an efficient, profitable manner.

CEOCFO: What is your current funding position?

Mr. Alexander: If you look at our performance reports, we have outstanding capital and we have magnificent earnings. We have one of the lowest efficiency ratios in the industry. We create enough money to fund all this and then some. We make the money before we spend it.

CEOCFO: Is reaching out to investors an important role for you as CEO?

Mr. Alexander: Currently, I am the largest single shareholder and I control much more stock than I own. Roughly 80% of the bank is owned by five groups, mine being the overwhelming largest group or person. Having said that, one of the drivers behind going on a public platform is as the bank grows, we want the bank to be bigger than one person without having to sell the bank, so one of our objectives is to provide ownership opportunities for a much broader base in the public.

We are very aggressive with our ESOP (Employee Stock Ownership Plan), as we want our employees that are principled in bringing all this to us to have a piece of the pie. We have really filed up the ESOP in the last twelve months.

CEOCFO: Do you still own cattle ranches in Elbert, El Paso and Lincoln counties?

Mr. Alexander: Yes. They are commercial ranches. From a personal standpoint I am basically very entrenched in the protein business, the cattle business on a commercial scale, and banking. The cattle business is a brutal bare-knuckle business. The business has slim margins, and you have to be exceptionally good at what you do at that scale. These are not hobby farms; these are operating business models. The worse part about that is they are so capital intensive. If you run them right and stay out of debt, they are very profitable, but it is challenging.

It has been a very good business for us, and we have very good employees and vendors that have worked with us for many years. It is a business that my family participates in and frankly at this stage I could sell it all and do very well, but my children want to stay in it, so that is what is keeping me tied to that.

CEOCFO: In closing, where will future growth come from for Stockmens Bank?

Mr. Alexander: Most of our growth in the last few years has been strictly organic and that is a positive. We are growing double-digits a year just organically without putting any capital ratio at risk. However, we do have a lot of plans for growth. If you look at our locations on the map you will see southwest Missouri and the Colorado operations, where we have customers all the way up to the Kansas/Colorado border. We have southwest Nebraska. This leaves us with a big gap between Colorado and Missouri that we would like to fill-in along that I-70 corridor.

In addition, if I see an opportunity to grow outside of that geographic corridor, I am going to take it because I am an opportunistic buyer. Although we would like to be caught up in the I-70 corridor operationally, that does not discount southern Nebraska or northern Oklahoma; we like all of those markets.

I have an outstanding, dynamic, energetic group of young executives that do not want to move around. They want to stay with Stockmens and keep doing this. I have to grow to keep them challenged. I need to make them rich at this business too. I have such good young talent right now, and I need to grow into them. I am hustling to keep up. I am at this because I want to be; I like it. I could have retired in my early forties. I do it all because I enjoy my employees and my customers. It is what I want to do and until that changes I will be here.

Stockmens Bank | Robert M. Alexander | Missouri Local Banks | Colorado Local Banks | Nebraska Community Banks | OTCQX: FBSI | Efficiency Ratios and High Loan to Deposits Drives Growth for Stockmens Bank | CEO Interviews | Community Banks | Middle Market Commercial Banks | Farm Loans Nebraska | Farm Loans Colorado | Farm Loans Missouri | Ag Loans Missouri | Ag Lenders Colorado | Ag Lending Nebraska | Agricultural Loans Colorado

“We have been able to avoid concentrations as opposed to a majority of smaller community banks. One of the primary drivers behind our business plan is we stay away from loan concentrations.”
Robert M. Alexander