Ted Awerkamp
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Latest Comments6 Comments
Interactive Q&A: Ted Awerkamp, President and CEO of Mercantile Bancorp
Our goal for MBR in any time frame is profitable growth in the business we know, community banking. That said, the business model for banks continues to morph and I'm reluctant to risk too far forward on what our model will look like that far out. Progressive community banks can compete and compete well with super regional and national brands, but it requires quality bankers and flexibility, so I'm prone to shorter term plans.
Providing a glimpse of specificity, as I indicated in an answer yesterday we are spending time enhancing trust and brokerage offerings from a community bank perspective to supplement the margin business and therefore total income stream. The level of demand for those services will increase with boomers and a community bank level approach to meeting those needs in a quality manner will be sought by consumers. We are and will compete well for that business.
As to your second question, and quite limited to my knowledge of other countries banking charter laws or allowance of foreign ownership, I would not perceive opportunities for a company such as ours to consider a foreign based entity. Too, I believe the US is very unique in its banking structure as to state vs. national charters, private vs. public companies and large vs. small banks.
Thank you for your interest.
Ted
Interactive Q&A: Ted Awerkamp, President and CEO of Mercantile Bancorp
We have not seen account attrition in banks we have purchased. In all fairness to the meaning of your question, I think appropriate to disclose we have not purchased a bank competing against one of our own in any market until our most recent, and the merger of those two banks is a year away. We expect none or minimal loss of business when that occurs.
As to our core clients being happy or unhappy with the results of our business strategy, I'll assume you mean from our bank clients versus our company owners. The general perception of our bank clients in the markets we serve is they are not aware that the bank is part of a company of banks. We have historically maintained the charter, the name, the local bank board and executive management. Decisions relative to their clients are theirs subject to standard policies. As we have executed a few charter collapses and merged some of our banks in the same regions over the last 18 months, we have seen no attrition from those steps as well. Responsive and quality service to the customer base is key.
To keep that quality intact in a growing organization is keeping in place the ability to listen to our customers and then communicate internally. Secondly, we are now developing consistent training across our collective banks. Lastly, we empower our employees to deal with our customers fairly and honestly on a common sense level. That approach generally diffuses any real problems.
When we lose business, and we of course do, it is generally due to pricing that is reflective of too many banks in a market, though I am sure most consumers would beg to differ to that thought.
Thank you for your inquiry.
Ted
Interactive Q&A: Ted Awerkamp, President and CEO of Mercantile Bancorp
Though Yahoo is a large site and I find it unfortunate they choose to minimalize small cap opportunities, I do not monitor every site. One could have quickly drilled down that in fact a split occurred by visiting our Company site.
To your direct questions:
1) Yes, the stock was split as a first step toward improving the number of shares outstanding and we recognize there is more to do.
2) Yes, there is low liquidity. We have engaged an investor relations firm and initiated a program to improve the same, including this forum and meeting with investors in person. From our beginning as a public company in early 2005, the steps to date have proven returns. However, liquidity might stay on the low side until more people begin to invest in banks again. Too, as you are aware, with low liquidity the leverage can work in favor of an investor as well as against one. More trading will attract more investors, including institutional and we believe that would be a healthy addition to our mix. Some very good investors like limited float stocks.
3) I can’t speak for the awareness of the investment community in general toward regional small caps, but it would stand to reason there are undiscovered opportunities when comparing market valuations of some to others.
4) My personal stock investing would offer little insight to MBR.
5) Again, I doubt my perception of advantages or disadvantages of a small cap-low liquidity issue are relevant to anyone’s interest, but most large-caps start out as a small cap, so the single issue of not investing in stocks similar to MBR by you or others would seem a missed opportunity if the overall fundamentals of a stock met your risk tolerances otherwise.
Though I doubt I have changed it, I do fully respect your disposition, and your taking the time to inquire.
Ted
Interactive Q&A: Ted Awerkamp, President and CEO of Mercantile Bancorp
I am absolutely seeing additional opportunities for MBR, and I am seeing and hearing of the current climate bringing forth an unusual number of sellers or merging opportunities to the market.
That being said, the challenge to us as a small-cap banking company is to protect our capital and invest wisely in markets and bankers that best positions MBR for quality, profitable growth. I purposefully did not include the word rapid.
Thank you for your question.
Ted
Interactive Q&A: Ted Awerkamp, President and CEO of Mercantile Bancorp
The delivery system of low-cost Internet banking has already proven not to be the end of community banks. Financial service consumers will always seek qualified advice and services from reputable companies and individuals they trust.
Our plan to maintain profitability on the margin side is to stay focused on interest rate risk and balance sheet management of our banks from a top down level. Interest rate markets have been difficult the last couple of years, and we have limitations to the tools available to manage the risk on our balance sheets, but it is a daily management focus to which we have become conditioned to, mistakes and all, and we learn from. It is the business we're in.
I too believe it is important to further develop dependable and quality non-margin income streams. It would be inappropriate to provide details of the strategy, but we are working to enhance across our bank platform services in trust and brokerage offerings to our customer base that we are experiencing success with already, and believe it can be a core benefit to the bottom line as well.
Interactive Q&A: Ted Awerkamp, President and CEO of Mercantile Bancorp
The only indirect effect we perceive at this time is that the subprime fallout is affecting the pricing of capital markets overall, and future borrowing could be more costly as a result thereof.
Though I can't speak for the community banking industry, my associations and feedback on the question nationally would lead me to believe most community banking companies would provide a similar assessment to ours.