When First Southern Bank of Lithonia, Ga., went looking for a new chief executive, it found one in an unlikely place: Newark, N.J.
James E. Young, formerly with City National Bank of New Jersey, was hired to revive the bank with a new style of leadership, restructure the management team, and rein in spending.
He replaced former chief executive Herbert K. Orise, the man who founded the bank in March 1987 - the first minority-owned institution established in Georgia since 1927.
First Southern, based in a racially mixed Atlanta suburb, was under orders from state banking authorities to restore confidence that it could operate in a sound manner, and from the Federal Deposit Insurance Corp. to keep better records of currency transactions.
In addition, the bank's board of directors was under a memorandum of understanding to bring in someone to replace Mr. Orise as president and chief executive.
Mr. Young had been senior vice president of administration and commercial lending at City National. He stresses the regulatory orders had nothing to do with the financials at First Southern.
"The challenge now is in my ability to manage the bank and manage it well," said Mr. Young, 44. "The primary test is setting better policies and procedure for the bank. I have made some changes since coming here in July."
Mr. Young has hired two lending officers and is restructuring the functions of the bank's chief financial and operations officers.
The retail, loan department, accounting, and investment staffs will report to Mr. Young.
"We will bring about a relationship with the major banks and work together for the betterment of the community," said Mr. Young.
If First Southern cannot finance a project, the bank will refer the customer to one of the other banks in the community.
First Southern Bank has a "satisfactory" Community Re-investment Act rating, and the bank is in compliance with the guidelines, said Mr. Young.
"CRA has always been the mission of minority-owed banks," said Mr. Young, "and keeping things documented was the problem."
Holding Its Own
First Southern's market area is southeast DeKalb County. It focuses on small to medium-sized businesses as wells as professionals. Southeast DeKalb in recent years has experienced growth in population and new businesses, said Mr. Young.
And though First Southern is surrounded by branches of Georgia Federal Bank, Nations-Bank of Georgia, Trust Company Bank, and Wachovia Bank of Georgia, Mr. Young said he doesn't feel threatened.
"We are all marketing money, and First Southern holds its own," he said, "We have a good track record of lending in the community."
Currently, the bank has 22 employees and total assets of $25 million, loans of $15 million, and deposits of $20 million. It had 31 months of uninterrupted profitability through June 30.
First Southern was chartered in March 1987. It maintains its original board of directors except for the founding president and chief executive, Mr. Orise.
Mr. Young has 22 years of banking experience, almost all of them with Chase Manhattan Bank.
He began his career as a management trainee with Chase, and became a lending officer in 1972.
He eventually became a vice president in the credit audit division, where he was responsible for assessing the quality of the bank's loan portfolio worldwide.
He later became a human resources specialist and was in charge of Chase's equal employment opportunity efforts before leaving in 1989 to join City National as vice president and chief commercial loan officer.
He was approached by an executive recruiting firm for the job of chief executive at First Southern Bank.
"I had mixed feelings about leaving City National but took advantage of an opportunity to run a bank."
Mr. Young, for his part, is glad for the opportunity to test his theory about running a bank.
"We have a competent staff in place and a very supportive board of directors," he said.
"I will manage the growth of the bank and continue to serve the small businesses, and at the same time look for ways to expand our capital to a larger community."First Southern BankAt a GlanceHeadquarters Lithonia, Ga.Established March 13, 1987Assets $25 millionROA 0.53%ROE 3.00%Data as of March 31