Houston Start-Up Will Focus on Small Businesses
Marissa Fajt
AUSTIN — They didn’t have signs. They didn’t have tellers. Mark Reiley and John Green didn’t even have a land line for their phones when they opened a new Houston branch for NewFirst Bank of El Campo, Tex., in September 2003.
But what the Houston bankers did have were strong connections in the business community, and by February 2006 the branch they had started with one assistant had accumulated assets of $35 million.
That experience inspired them to set out on a new challenge. They left NewFirst in February and last month filed an application with the Office of the Comptroller of Currency to start Icon Bank of Texas. If the application is approved, Mr. Reiley and Mr. Green expect to open Icon Bank in October.
Like several of the other 26 community banks that have opened across Texas since 2003, the Houston-based Icon will focus on professionals, executives, and small and midsize businesses. Others in Texas pursuing this market include Professional Bank in Lakewood, which opened in 2004 with a plan to cater to doctors and lawyers but shifted gears to focus on small and midsize businesses.
Mr. Reiley said consolidation continues to create opportunities for start-ups. “Our shareholders and customers, the majority of which are small-business owners, have told us the small-business market is underserved, and they find it difficult to work with the larger banks,” he said.
James Miller, Professional’s chief executive and a former executive at Citibank and what is now JPMorgan Chase Bank, agreed. Mr. Miller, who joined Professional last year, said large banks do a good job serving companies that have revenue of $10 million or more, but they pay less attention to smaller ones.
Which leaves the $1 million-to-$10 million crowd “for us,” Mr. Miller said. “That’s a big market.”
The $56 million-asset Professional opened two branches in Texas this year, in Park City and Garland. Mr. Miller expects Professional to have $80 million to $85 million of assets by yearend.
Mr. Miller and Mr. Reiley said it’s crucial for any start-up to have board members with ties to the local business community so they can bring in referrals.
Icon’s dozens of organizers, including six doctors, a real estate broker, a corporate financial consultant, and an accountant, have pooled seed money of about $1.2 million. Mr. Green said they are aiming for at least $10 million of start-up capital.
Still, much of the responsibility for drumming up business would fall on Mr. Green, Mr. Reiley, and Chris Kelley, another Houston banker, who will be the president of the branch Icon plans to open in Clear Lake, Tex.
Mr. Reiley and Mr. Green first met when they were working in Houston for the Office of the Comptroller of Currency in the late 1980s and early 1990s.
Both later joined banks and went their separate ways. They teamed up again in 2003 when Mr. Reiley, then with NewFirst, hired Mr. Green to help him start the Houston office — which for the first four months was 300 square feet in an office building. Even after they moved to larger digs, the office looked and operated less like a traditional branch — there were no signs or tellers — than like a business development office.
Today, Mr. Reiley and Mr. Green are once again in a small office trying to generate interest in Icon Bank. Along with Mr. Kelly, they have about a half-century of banking experience. That does not include their time at the OCC, which Mr. Reiley said has given them an outside perspective on how to run a bank.
“It is one of those things” he said. “You see how things are done right and done wrong, and you think you can build a better mousetrap.”
