RankingBanking 25 - Flipbook - Page 17
15
not going to a class with everyone else,’” Brown
explains. “He wasn’t too proud to say, ‘I should
have known better.’”
The culture is reflected in a five-pillared visual
that looks like the façade of a Greek temple
“They pick their spots, and they win
in those spots. That’s what banks this
size need to do to be successful.”
and is known in-house as “the monument.” It
includes names of past employees as the base.
Steps labeled with values like teamwork, integrity
Tom Brown, Second Curve Capital
and providing superior customer service climb to
a platform that supports the pillars. The pillars
represent a set of broad initiatives — “create
exceptional experiences” or “produce superior
don’t reinforce the mission. While much of the
financials” — that can help deliver on goals out-
industry focuses on return on tangible common eq-
lined in three- and five-year plans.
uity, for example, Murphy, who owns 17.2% of the
A thin strip at the base of the roof features
outstanding shares, views return on assets as a tru-
the billboard mission statement: “to help clients
er measure of the institution’s health. The company
achieve security, build wealth and realize their
doesn’t do much commercial real estate lending,
dreams.” The incline of the roof reinforces what
a bread-and-butter business for many community
all bankers say they want long term: to offer
banks, limiting most such loans to existing clients.
high-quality service, win more business and be a
good place to work.
Its executive incentive plans are based on the
stock’s book value, not its market value — some-
Nobody quite recalls when the monument was
thing Brown says is unusual. “We can’t control
born — sometime around 2000 seems a popular
what the market thinks about banks,” Murphy
answer — but it’s become a cultural guidepost,
explains. “What we can control is what we earn,
highlighted in employee orientation meetings,
what stays in the bank as book value and what
referenced in company town hall meetings and
gets paid out in dividends.” Dividends have grown
discussed in officers’ meetings. “It helps drive a lot
by an average rate of nearly 9% since 2015.
of our thoughts and decision-making,” Bauer says.
Nor does the company have much appetite for
“The monument represents the core of what we’re
mergers and acquisitions — its last deal was in
trying to do and how we do it.”
2007, for a small bank in Valparaiso, Indiana —
focusing instead on organic growth. Despite its
Independent Thinkers
The monument’s uniqueness reflects 1st
Source’s willingness to do things its own way. Mur-
position in a geography coveted by many bigger
banks, Murphy says the board has little interest in
selling, either.
phy and his lieutenants are regulars at industry
“Bankers tend to be like lemmings that jump on
events and keep active tabs on the latest trends.
the beach and die together,” Murphy says. “You’ve
For example, the bank was an early mover on
got to watch the fads and not do what everyone
instant payments and has sent or received $270
else is doing.” It’s an approach that has served 1st
million in 250,000 transactions via FedNow and
Source and its investors well.
The Clearing House’s RTP platform since 2023.
But leaders also are more than willing to ignore
current trends or conventional wisdom if they
John Engen is a contributing writer for
Bank Director.
