NASHVILLE, Tenn. — Studio Bank is taking every step it can in its early days to establish a unique identity.
The bank, which opened in mid-June after raising $46 million, operates from the fourth floor of an office building in The Gulch, a trendy area just outside of downtown Nashville. The interior is adorned with imaginative murals, creating an inviting space for events like a recent craft beer and pizza party for clients and prospects.
Organizers even chose a unique mascot — a French bulldog they named Frenchie — to represent a goal of being “sophisticated but not pompous.”
Each decision helps set Studio apart from other banks in the market, said CEO Aaron Dorn.
“When you look at the murals … or our logo and website, it is a form of self-expression as much as it is an appeal to our clients,” Dorn said. “The approach is authenticity, first and foremost. And it certainly differentiates us.
Dorn, 38, is also young for a bank CEO. He attributes his ability to fill the role to early experiences at Avenue Financial, where he was chief marketing officer, and the Marines.
Dorn recently discussed the first few months at Studio, and what he wants to see from the bank in coming months. Here is an edited transcript of the conversation.
How is Studio doing?
AARON DORN: I couldn’t have asked for a better start. We’re ahead of our projections, and we’re operating more efficiently than we expected. We’re north of $90 million in assets. We’ve been able to grow deposits, and our loan demand has been very high. … It’s just a fantastic start for us.
What’s driving early results? Is it due to being based in a hot market like Nashville, or the coverage tied to being the state’s first new bank since the financial crisis?
I would point to prior relationships and the coalition we built while forming this bank.
The majority of it has been the client relationships that our staff has had for a really long time. It is also due to the relationships from our executive team and our board of directors. We have also taken a somewhat unconventional approach by having a board of directors and an advisory board. That has led to a lot of word-of-mouth and referrals.
We had essentially 345 or so local investors during our capital raise. We had a two-part proposal when we pitched them on being investors — to be an investor but also to bank with us. We also asked them to refer business to us. So far, we have a very engaged local investor group.
How’s the relationship with regulators been since opening?
It’s been great so far. We’re executing on the plan we submitted to them. We’re not going to make a wholesale change to our policies and plans in the first five months. So they’re just making sure that we execute on things that we said we would. We are preparing for the regulators’ six-month visit where they will make sure we’re following the policies we adopted. They’ll make sure the board is functioning properly and that monitoring practices have been implemented. … That will be in just a couple of weeks.
Throughout the application process they were very collaborative. Certainly it was a very thorough and exhaustive process. They did their jobs very well.
You’re on the fourth story of an building with space decorated with murals. A craft beer and pizza party will soon start. Explain the thinking.
We appreciate creativity in a very real way. We want to express that part of ourselves through our own space. When you look at the murals on the walls, or our logo and website, it is a form of self-expression as much as it is an appeal to our clients. The approach is authenticity, first and foremost. And it certainly differentiates us in the market.
We have spent far less than our competitors have, in terms of fixed costs. So uniqueness doesn’t necessarily mean higher cost.
What types of loans are you making?
It is diverse; that has been very intentional. It was part of our business plan. You do that through the bankers that you hire. So we have one banker who focuses on music and entertainment. We have one that works with nonprofits and another who does commercial real estate. Others focus on residential development and medical practices. So we have created a depth of expertise within certain lanes, while also creating diversity in the portfolio. That’s how it is playing out.
You’re younger than most bank CEOs. What will it take to have more people your age doing this?
I have an uncommon set of experiences for someone of my age. I was fortunate enough to be able to help start a de novo bank when I was 25. During my service in the military I, at one point, led about 100 Marines. I was an intelligence officer, which matches up well with compliance and oversight. Then I was able to join the management team of the bank that I helped start. We built it to $1 billion in assets and went public.
The first thing regulators look at in a new bank application is the strength of the management team. The CEO is an important part of that. For established banks, it ultimately requires a management team to identify talent within their own organization, even if they happen to be younger, and give them uncommon authority within the bank. You have to give them the opportunity to earn those uncommon experiences.
For me, it took confidence on the part of the Avenue team, and the military being willing to give me a certain level of authority. I owe a lot to them.
What will Studio look like a year from now?
A part of the forecasting and planning was in-depth research into prior de novos in the Nashville market from the mid-1990s to the mid-2000s. We are absolutely on track to have a consistent level of performance to some of the more successful de novos in Nashville over that time. That’s the standard we have set for ourselves.
Have there been any surprises or lessons learned so far?
We launched with a certain value proposition. While you plan for it you can’t really test it until you’re actually a bank. So you expect some level of correction or adjustment — a pivot of some kind. I’ve been pleasantly surprised that, literally, all of the core values we pitched when we formed the bank have been true and real.
I believe a launch is smoother the more you play devil’s advocate with yourself upfront, and the more you test your assumptions. You essentially contingency-plan. There are a thousand obstacles that can stand in your way. It will make it much smoother if you have thoroughly thought through them and wondered about what could be. That has probably been the lesson learned for me.
