FC Holdings Inc. chief executive Nigel Harrison’s stated goal is to aggressively expand his Houston company through acquisitions and sell it for what he hopes will be top dollar in seven to 10 years.
This largely explains Mr. Harrison’s unusual decision in February to hire a longtime investment banker, Wade Schuessler, to be the company’s president. Mr. Schuessler may not have much retail banking experience — he was a bank teller in college — but he is adept at raising capital and finding acquisition targets.
“An organization like Nigel’s needs capital on a regular basis,” said Mr. Schuessler, who took over last month as president of the four-bank, $346 million-asset holding company. “My skill sets for interacting with investors will be very beneficial to him.”
The banking industry does not always hire its top executives from within; many former consultants, academics, accountants, marketers, retail executives, and professionals from a number of industries have found second careers running community banks.
Investment bankers have been known to shift to careers at retail banks, but usually in somewhat lower-level posts, like head of M&A. Leaping straight into a presidency is unusual, observers said.
“Usually, it works the other way … bankers become investment bankers,” said Don Wood, the managing partner in the Houston office of Sutherland Asbill & Brennan LLP. “I’ve seen lawyers go inside as bank executives and to the investment banking side, but I can’t think of an investment banking type that has moved into a leadership position in a community bank.”
Mr. Schuessler, 45, had worked in investment banking for 16 years, most recently as a managing director in the financial institutions group of the Dallas office of Bear, Stearns & Co. Inc. Previously, he was an examiner at the Dallas Federal Reserve Bank.
To Mr. Harrison, hiring Mr. Schuessler made perfect sense. FC Holdings does not need a traditional banker as president, he said, because the presidents of each bank subsidiary are responsible for running them day-to-day. This frees up Mr. Schuessler to devote his time to raising capital, finding acquisition targets, and, ultimately, getting the highest price when FC Holdings sells itself.
“The holding company is really the vehicle that affords the independent banks the ability to take care of their business,” said Mr. Harrison, who founded FC Holdings in 2005 after another company he founded, First Community Capital Corp., was sold to Wells Fargo & Co. “The holding company is vested with the responsibility to raise capital and deal with the investment community.”
Others in the industry see the logic behind this approach.
“I think the capital-raising aspect is the brilliance of this move,” said Chet Fenimore, a partner in Jenkens and Gilchrist PC in Austin. “You are basically bringing in somebody that, over his career, has been very involved in raising capital for both private and public banks.”
Mr. Harrison’s plan for FC Holdings is to build a network of banks along the Interstate 45, 35, and 10 corridors — first through acquisitions, with organic growth to come later. Since late 2005, the company has bought three small banks (to go along with a fourth charter it retained in the deal with Wells Fargo), and Mr. Harrison has said that if all goes according to plan FC Holdings would have $1 billion of assets by the end of 2008.
Its four banks are: First Community Bank Central Texas in Meridian; First Community Bank Fort Bend in Sugar Land; First Community Bank the Woodlands in Tomball; and First Community Bank San Antonio.
The company lost about $1.2 million last year and probably will not turn a profit for another 12 to 18 months, Mr. Harrison said, as it continues scouting for acquisitions and building its infrastructure.
Mr. Harrison has done right by investors in the past. First Community, which he founded in 1995, fetched a whopping 5.37 times its tangible book value when it was sold a decade later.
