Feb 23, 2023

“Starting a bank” was never on my to-do list.

Feb 23, 2023 | Brian's Blog

But that’s exactly what I did – In 2008.
Good timing.

I was working with GE when I was asked to join 2 partners to start a bank in Utah.

Just 1 problem – I knew nothing about banking.
At all.

I just knew I had a savings account and a credit card, and wanted to get a mortgage soon.
Talk about experience.

My partners in this endeavor were experienced financial services executives so I was in good company to gain some “on the job” training.

To start, GE infused $1B in capital and we started raising deposits through the brokered CD market.
In less than four months, we raised over $9B in brokered CDs, which had to be paid back at varying times over the course of ~3 years.

Next, we acquired CitiCapital, the third largest equipment lender at the time, which gave us a bunch of loans to fill out our balance sheet:

✅ Equity – Thanks Big GE.
✅ Deposits (Liabilities) – The Triple A rating GE had at the time meant there was an insatiable appetite for CD’s backed by GE’s balance sheet.
✅ Loans (Assets) – Fortunately we found an acquisition that was sizable and had equipment loans and leases that we had experience with.

In the midst of all of this, we had to learn the ins and outs of banking.
So we did what seemed obvious:

We looked up every single law, rule, and regulation we would have to abide by and put it in a spreadsheet.

[Turns out… That’s not typical at all.
But I’m 100% convinced that was the biggest reason for our success – At least our success in not getting shutdown by the regulators.]

Once we had our first column of laws and regulations, we built out the rest of our spreadsheet:

Law → Process → Person/Team to execute → 1st line of defense (compliance) → 2nd line of defense (audit)

With this in place, we could restore profitability:

✅ Bring in more deposits
✅ Re-price our existing portfolio
✅ Book bigger loans at better pricing
✅ Re-price existing deposits to be lower cost
✅ Get rid of customers who were not in compliance or difficult to service

In 4 months.
$25M → $11B.
What an adventure.

Follow Brian on Linkedin: Brian Pillmore




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