First
State ’s Makeover
by
Jill Maunder
Teamwork plus one strong leader buff
up this once lackluster Sarasota - St.Petersbug bank.
WHEN
VETERAN BANKER COREY J. COUGHLIN TOOK charge of First State
Bank and called for a monthly system- wide staff meeting,
his managers said it could never happen. They said an after-hours
meeting would conflict with dinnertime; single parents would
be forced to arrange for babysitters; and, with six locations
in Pinellas and Sarasota counties, too many employees would
have a long commute over the Sunshine Skyway Bridge.
But
the can-do Coughlin, adamant about establishing teamwork
and prosperity in what had been a divided, lackluster bank,
refused to accept those reasons. He decreed that the meetings
would include dinner, babysitters and bus transportation
from Sarasota to Pinellas, or vice versa (the meeting site
alternates).
“There
was this philosophy that, if we hadn’t done it before,
it couldn’t be done,” recalls Coughlin, who from
his first day at First State set out to demonstrate that
things could be done, not just differently but profitably.
“But
we don’t have that philosophy anymore.
Our motto is, ‘Whatever it is, we find a way or
make a way.’”
Since
Coughlin’s arrival as president and chief executive
officer, First State Bank – which was created by a
merger of two undercapitalized banks – has grown soundly.
As of June 30, assets totaled $186- million, up 20 percent
from one year earlier; loans amounted to $149-million, up
30 percent; and deposits were $170-million, up 21 percent.
The figures for the previous year-to-date are from June
30, 2002 – Coughlin’s first day on the job.
Additionally,
by year’s end, Coughlin confidently predicts that First
State Bank will have a profit of $1-million after taxes.
It is on pace to that goal, making about $100,000 per month
after taxes.
The
enthusiastic Coughlin – known as a go-getter as well
as
an expert in commercial lending – is elated. Last summer,
he predicted at a managers’ planning session that the
bank would have its best year ever. “The only one who
believed whole-heartedly in it was me,” Coughlin recalls.
“The others were politely skeptical. Now, we’ve
done better than we had predicted we’d do.”
He also
has the bank’s staff of 65 – up from 50 when he
took charge – focused on the goal through participation
in four task forces, which have
members from throughout the organization.
Employees
also were involved in choosing a bank slogan – “First
State Bank, Second To None.” The effort was handled
as a contest for which creators of the three top entries
received prizes. Coughlin likes contests and even has the
board of directors competing for the most referrals of customers.
Tickets to a Tampa Bay Buccaneers game are the prize, but
Coughlin is finding those harder to acquire than customers.
The
state-chartered bank, owned by the holding company First
State Financial Corp. (of which Coughlin also is president
and CEO), is the product of a merger of First State Bank
of Sarasota and what originally was Rutland Bank in south
Pinellas. The latter changed its name to First State Bank
of Pinellas after investors from Kentucky and West Virginia,
who continue to control the bank, bought into Rutland Bank
several years after acquiring the Sarasota bank.
Meshing
the staffs of the two institutions was daunting. One priority
was “getting everybody on the same team,” says
board member Nancy Rutland, whose father and brother founded
the predecessor bank in Pinellas. (Her late grandfather
was St. Petersburg banking pioneer Hubert Rutland.)
With
three branches in each of First
State’s two counties – a big bridge, a bay
and Manatee County separating them –
there were plenty of obstacles to unity.
Also, for some time, the bank had been
almost a captainless ship. It ran through
several interim CEOs.
The
transition to a system-wide attitude of a single staff working
together took several months. Coughlin says he knew he’d
won the battle when he received a phone call about a skeptical
teller from her boss who related that he’d overheard
her telling a customer, “No, no, it’s not them,
it’s us.”
Coughlin
wants to instill a sense of empowerment, even ownership,
in employees. “It’s really the philosophy and
culture and all those things that you can not put on a balance
sheet,” he says. “What’s it worth to have
someone spirited and excited about what they do?”
Board
member J.C. “Bud” Felix of St.
Petersburg says of Coughlin: “He’s made
us feel like it’s one bank. He’s put
together a management staff that’s terrific.
It’s a whole new ballgame.”
Coughlin
also has decentralized the bank, spreading departments throughout
the two counties. For example, branch administration is
based in Pinellas and a new credit department in Sarasota.
Executive offices are housed in downtown Sarasota. Coughlin
favors the decentralized approach “so everybody understands
we’re one bank operating in two counties.” He
divides his week between Pinellas and Sarasota (he has homes
in both counties) and tries to visit each branch once a
week.
When
First State hired Coughlin, it got itself a major name in
Florida banking. “We wanted a strong, local banking
person,” says board chairman Thomas Wright, of Worthington,
KY, who is the largest shareholder in the bank.
Wright
and fellow board members
had sought executive prospects
through intermediaries for some time.
Then Coughlin, who had considered
starting a new bank, stepped into the
equation. “Corey’s grasp of community
banking is unmatched in this region,”
says board member Lisa Ulrich of St.
Petersburg.
Although
Coughlin’s reputation in banking is rooted in St. Petersburg,
Ulrich did not know him when she learned that some of her
First State board members were considering hiring him. She
consulted her attorney father, Robert L. Ulrich, who not
only is the former mayor of St. Petersburg, but chairman
of the board of SouthTrust Bank of West Florida, one of
Coughlin’s former employers.
“If
you want to hire a star, then you
hire a Corey Coughlin,” Robert Ulrich
remembers telling his daughter. “He is a
professional in every sense of the word.”
First
State is the smallest bank for
which Coughlin has worked, but he is
quick to volunteer, “It won’t be the
smallest bank for long!” In a small bank,
Coughlin says, “You’ve got to keep your
eye on capital and develop relationships
with other banks to make bigger loans.
It’s more intimate. Our customers mean more to us.”
In a
gesture of appreciation to customers,
First State purchased an evening
at the Asolo Theater in Sarasota for 75
couples and a similar evening at American
Stage for customers in St. Petersburg.
“You can’t do that if you’re Bank
of America,” Coughlin says.
That’s
one bank for which he hasn’t worked. Coughlin began
his career in 1971 at First National Bank in St. Petersburg
and moved through the ranks of three banks in Florida and
Alabama before joining SouthTrust Bank of West Florida,
where he rose to executive vice president and chief operating
officer. He next joined SouthTrust Bank of Northeast Florida
as president/CEO in 1994; became president/CEO of $200-million
First National Bank in Orlando in 1997; and in 1998, president/COO
of $300- million CNB National Bank of Jack- sonville. For
the next few years, Coughlin had a banking and management
consulting company.
With
many banking veterans as friends, Coughlin called on three
of them to help lead First State. Paul Bailey recently was
president of Signature Bank and now is First State’s
senior vice president and the head of professional and executive
lending. Jed Wilkinson, previously with SouthTrust, is First
State’s senior retail officer. And Barry Warren, Coughlin’s
colleague since 1971, is First State’s senior operations
officer.
Ever
a U.S. Marine (one admirer says Coughlin “bleeds Semper
Fi”), Coughlin uses allusions to military maneuvers
when describing how he deploys First State’s staff.
When he talks about teaming a commercial lender with a consumer
officer for calls on small businesses, Coughlin refers to
“our air/ground team.” Commercial lenders are
“jet pilots” and consumer officers, the “infantry.”
These
efforts are paying off. When he signed on at First State,
consumer loans – which at higher interest rates are
more profitable – comprised four percent of its loans
and now account for eight percent, he says.
Also
since Coughlin’s arrival, First
State’s capital base has grown from $11
million to $12 million. Significantly, its
return on assets (ROA) is up 53 percent,
to 0.55. His goal: 1.25 ROA by 2004 or
2005, or greater.
Coughlin
says his plan is “to make
sure our core bank is operating at a high
performance level.”
