A Handcrafted Banking Turnaround

The year was 2011, and Blaine Jackson faced a tough choice.

The then-34-year-old and his young family were seeking to relocate from Atlanta’s northwestern suburbs to Charlotte, N.C. Jackson was the chief financial officer at a struggling community bank in Woodstock, right in the “ring of death,” as the circle of failing banks around Atlanta was known in the years shortly after the financial crisis.

His job offer in Charlotte would provide little escape. Although “there appeared to be less of a future in Georgia,” the bank pursuing him to be its new CFO had grown very rapidly and gorged on loans that had gone sour. Unlike many other North Carolina banks, NewDominion Bank was not weathering the storm well.

The board had fired its management team and brought in new players, and new CEO John Hipp—himself lured out of retirement to run the turnaround—was looking for a CFO. “Every CFO who looked at this thing, including me, looked at the numbers and said, ‘Ooh, this thing looks a little too far gone,’” says Jackson. “I was really scared of it. I turned the job down. But they were really persistent.”

His wife, Kim, emphasized the opportunity and reminded him of their plans to move to Charlotte. So they took a shot. “I believed in the management team, so there was a bright future there—but there were no guarantees,” he says.

Out of the frying pan

Like many de novos in the Southeast, since its founding in 2005 NewDominion had aggressively pursued commercial real estate loans. The bank’s assets quickly grew to nearly $570 million by 2009, but by then the deteriorating real estate market was already seeing loans go sour. Although NewDominion had raised $40 million in capital at launch—then a record for a North Carolina de novo—it wasn’t enough to cover the mounting losses. In 2010, the year regulators imposed a consent order and the board replaced management, NewDominion lost more than $24 million. By 2011, when Jackson arrived, the bank’s leverage ratio was hovering just above a failure level at 2.15 percent.

“No miracle was great enough to save this bank without capital,” he remembers. “It just wasn’t going to happen.”

Efforts to raise capital from private equity went nowhere, so Hipp, Jackson and his colleagues turned to a retail sales pitch. “We decided to roll up our sleeves and realize we had to do it on our own,” Jackson says. Starting in June 2012, “every single Wednesday for a year straight, our CEO and I held a weekly luncheon, invited anybody local we could think of, showed them our video and our PowerPoint and said, ‘Do you want to buy some stock?’”

Thanks to old-fashioned hustle and referrals from local board members, the effort raised $10.5 million in equity¬—$500,000 more than Jackson’s goal—from 260 mostly Charlotte-area investors, with an average investment of $40,000.

“It allowed us to survive, but it did not allow us to thrive,” Jackson reflects. It also gave him the confidence to move Kim and their and two sons—now 12 and 11—to Charlotte. (For his first year, he had been sharing a bank-owned, foreclosed-upon townhouse with Hipp and the bank’s chief credit officer and commuting back to Atlanta on weekends.) With the bank’s capital position stable, management cleaned up the balance sheet and worked through the bad loans. At the end of 2014, as planned, Hipp retired again and Jackson was named one of the nation’s youngest bank CEOs.

‘Thrive capital’

His first task as CEO was to get the “thrive capital” NewDominion needed. By the end of 2015, with the bank in much better shape and a good track record for the executive team, he had raised $20 million from institutional investors, bringing the bank’s leverage ratio up to 10.5 percent. That was NewDominion’s last year of losses; 2016 saw a $750,000 profit, and the consent order was lifted in February. The bank has about $330 million in assets.

Jackson then began reintroducing the bank to Charlotte. With a focus on established millennials, small business owners, recent arrivals to transient Charlotte and “mass affluent” middle-class customers, NewDominion launched a new brand built around the slogan “banking handcrafted.” Complementing the reclaimed wood finishes in the bank’s branches is an emphasis on “concierge” financial services, Jackson says. “It means that we will take the time to understand your situation and do our best to tailor things to meet your needs. It’s much more about the experience than the transaction.”

The rebrand builds on the spirit of Hipp and Jackson’s local capital raise. Hundreds of Charlotteans took a stake in the bank, and as one of only a handful of small banks based in Charlotte, Jackson says “the community really rallied around that.”

The visual elements of the campaign echo a previous stop in Jackson’s career—Acru, a project of First Cherokee to develop a next generation wealth management brand. Jackson was part of the team that adapted retail ideas from Portland, Ore.-based Umpqua Bank into Acru, whose branch included a coffee bar, areas for customers to work or hold business meetings and a variety of venues for sales and financial planning consultations. (Acru was short-lived; only a year after it launched, and after Jackson had moved on, First Cherokee was closed by regulators.) Jackson is excited to see the development of those concepts take fruit at NewDominion. “It’s a brand and imagery that works well with a metropolitan area,” he says.

Lessons learned the hard way

Jackson got his start professionally as an accountant auditing community banks in the Southeast before joining First Cherokee, and he’s learned lessons from observing both the 2000s boom years and the post-crisis 2010s. “To go through something like that earlier in my career was a true blessing,” he reflects. “I saw a lot of CEOs and leaders who learned those life lessons in their 60s, when they were about to retire and they saw all their wealth go away. I learned those lessons in my 20s and 30s.”

The key takeaway: “how easily and how quickly everything can be taken away from you, which causes us to pay attention to safety and soundness first.”

NewDominion has an ambitious growth plan—Jackson wants to double the bank’s size in five years—but what he tells his team is that “we want to grow, but not at the expense of quality. Man alive, that can just eat you up in 10 seconds. We’re never going to give on credit quality.”

This article originally appeared in the May/June issue of the ABA Banking Journal.

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