A Banker’s Story: Lessons from a Start Up Bank

Seven years ago after I left a large regional bank as president of the Nashville, Tennessee market, I wrestled with the idea of starting a bank, considering that as well as other career options. Weighing the pros and cons, my wife wrote on a cocktail napkin, “Ron likes to be in charge.” That was the end of that discussion and the start of Avenue Bank.

Over the past few years, I’ve been asked many times about starting a bank during the economic crisis and how we managed to survive, and thrive. So, within the limitations of this space, following are some of the keys to our success.

The #1 rule in real estate, “location, location, location,” proves true in banking as well, because your market has a significant impact on your ability to be successful. Market demographics, business environment and real estate values all determine whether your market is on the upswing or downturn—whether investments will be made or if they will go to other market areas.

In Nashville, we are enjoying unprecedented national recognition for our positive market growth, the rebound of real estate values, and our ability to recruit business investments. In the past 20 years, Nashville’s population has grown 60 percent with a strong demographic profile, and 234,000 new jobs have been created. But along with that, Nashville’s unique character and personality, our creative spirit, really defines us.

In founding Avenue Bank in 2007, we wanted to embody that creative spirit and redefine how clients experience banking. We established our brand with client evangelists who tell others about their surprising and incomparable relationship with Avenue Bank.

With more than 60 banks in our market area, people would say to us, “We don’t need another bank,” so we took that statement head on and one of our first marketing phrases was, “Not Another Bank.” It was a bold introduction, and delivering on that promise meant that we had to hire the best, empower them to take care of clients, create a great work environment, and focus every employee on achieving a few well-defined goals, as a team, each year. The strategic selection of our four branch locations positioned us in proximity of 70 percent of the deposits in this market area. And the decision to open all four within 18 months of starting the bank was another bold move that showed our commitment to the market.

One of the biggest factors in our success has absolutely been living by the mantra “right person in the right job.” Every employee has a role, and the team has to work together to deliver the kind of service we are known for. So, those employees who do not directly interact with clients know that they are in a key support role that is directly tied to client service.

Our concierge banking model allowed us to staff the branch locations leanly, with every banker trained to conduct transactions as well as open accounts or serve any other retail banking need. The use of free-standing TCRs (teller cash recyclers) eliminated the barriers of a traditional teller row, creating a modern and accessible environment. A benefit of our growth and success is our ability to hire top performing employees in a highly competitive environment. We seek servant leaders who have a real passion for taking care of clients, and we place a great importance on finding those that are the right cultural fit.

As a recognized employer of choice, we have been able to recruit seasoned commercial and private client bankers to join our team; many of them cite our local decision making as key to their decision to move. The same is true for experienced operations associates, many of them seeking an environment where they are valued.

As with any organization, leadership is vitally important. We have built trust in our leadership team by being transparent about our finances and decisions that impact employees. We use weekly all-employee meetings and newsletters to communicate, avoiding the interpretation that can occur when messages are passed through a hierarchy. Employees see and hear directly from me. Our leadership team establishes focused goals, bears the burden of tough decisions, and sets the tone for success.

I feel extremely proud when I look at our balance sheet and see $890 million in total assets, all organic growth. Avenue Bank achieved profitability in the first quarter of 2010, and now has shown 16 consecutive quarters of sustained profitability through 2013. Last year, our loan portfolio grew 26 percent, again all organic growth, which I attribute to the right bankers, in the right job, and a harmonious relationship with our credit team that works together to get a deal done.

But even as we look forward to achieving our next milestone of $1 billion in assets, I am more satisfied thinking about the relationships those numbers represent, the jobs we have created, and the support we’ve given to so many organizations in our community. Avenue Bank has more than fulfilled my vision.