Ramsey Hamadi knew opening a bank would be a challenge.
But Hamadi, CEO of Triad Business Bank in Greensboro, N.C., had no clue how big a test his team would face. The de novo debuted just days after the coronavirus outbreak was declared a pandemic, and two weeks before a
The bank, which avoided being saddled with forbearance requests, was in a good position to mobilize when the Paycheck Protection Program launched on April 10. Though the bank only had a couple dozen employees, including six commercial lenders, it was able to originate more than $108 million loans under the program.
Many of those borrowers were new customers for the fledgling bank. A willingness to help businesses spurned by other lenders also helped Triad build goodwill that would have otherwise taken months to earn, Hamadi said.
“That big splash allowed us to capture a lot of interest within the market,” he said.
PPP fees are also expected to help the $241 million-asset bank reach profitability ahead of schedule. That could happen by the end of next year.
The bigger challenges for Triad will involve retaining as many PPP borrowers as possible after their loans are forgiven while continuing to add traditional clients amid a still sluggish economy.
For those reasons, Hamadi is one of American Banker’s community bankers to watch in 2021.
Here is an edited transcript of a recent conversation with Hamadi.
Walk us through the bank’s first weeks in business.
RAMSEY HAMADI: We opened on March 16 and immediately we found ourselves as a single-purpose entity. Between the two rounds of PPP we did $108 million in loans to 308 businesses, serving many new customers through the process. It also helped us build a nice deposit base.
It got us started. That big splash allowed us to capture a lot of interest within the market, and our pipeline never really slowed down. Feels like the more this bank has done the more we have gained credibility in the market and the more referrals we get.
While it took us away from our core business plan, the PPP only delayed us for a few months. By June, we were able to shift back to our core focus of providing loans and deposits to commercial operating businesses.
Where do things stand now with your business plan?
Though six months in business, 70% of our commercial loans are tied to owner-occupied real estate and operating lines to businesses. We’ve been able to really serve our mission and vision at a time when the community and the market needed help. That’s pretty remarkable for a de novo bank to come in and help the community save 12,000 jobs.
What’s next?
We’ve been hitting every benchmark with our pro forma financials. We had a six-quarter plan to reach core profitability, meaning we should be profitable in the seventh quarter, excluding provision expense. We are on course to do exactly that — and it doesn’t include the $3 million in profit from PPP.
I see us [having $200 million to $300 million in assets] at the end of our first year. Our management team has been discussing the terrific start and whether there are things we can do to make us even better. Is it possible for us to reach another level and, if so, how do we achieve that?
We’re considering internal and external changes. The strategic plan we wrote in large part for the regulators was completed in April 2019. An internal improvement may involve processes. Could we increase the loan amount a loan officer can approve without the chief credit officer to $1 million instead of $750,000? We also have a highly motivated board who have had outstanding participation in terms of referrals. We’ve been talking to them about their own goals and objectives.
We’re trying not to take the joy of being a small organization away from our employees
What about the role of technology?
Technology was built into our business plan with a higher spend than that of most banks. We went after the product we thought had the best treasury suite of products. We’ve had customers move over from some of the biggest banks in the country, and they’ve been pleased.
You only have six commercial lenders. Any hiring plans?
I don’t want to hire more employees without understanding the real benefit. It must be a unique situation. We are executing on the plan as it is.
Instead of putting all the weight on the six lenders, we’re shifting a lot of the business development to our 15-member board and our 300 investors. We’re trying to get them selling for us. We’re looking to make this a community effort. We really haven’t spent any money marketing the bank.
We are using more of our time getting existing investors plugged in and thinking about us — and bringing us their business. I’m spending more time getting to know as many of our [investors] as I can.
