To position itself as the bank of choice for small-business owners and wealthy individuals, Enterprise Bank and Trust in Clayton, Mo., created its own “university” 18 months ago.
The result, it says: four times as many leads in its target market. Now the bank is looking for acquisitions to build on that success.
“Enterprise University” offers such courses as Marketing for Businesses and Personal Financial Management. The chief executive officer of the bank’s holding company, Enterprise Financial Services Corp., even leads a discussion group in which the heads of small companies get together to share ideas.
Some 1,300 students have enrolled in the nonaccredited school since the bank began offering classes in St. Louis and Kansas City. More important for the $1 billion-asset bank, though, is how it the courses have helped generate business.
Enterprise used to generate about 60 leads for its wealth management business a year, said Kevin C. Eichner, the president and CEO of the holding company. Now is getting about 60 a quarter, he said.
Mr. Eichner said that Enterprise created the school to connect with small-business owners and the wealthy — two groups that generally ask for more personal service.
A second benefit is that Enterprise employees who are involved in the classes learn how its full product line can be used for each customer. Mr. Eichner said the bankers are spotting more cross-selling opportunities as they study customers’ needs and Enterprise’s offerings.
But Mr. Eichner said that Enterprise is nowhere near its goal — to be the dominant provider of banking and wealth management products and services in St. Louis, Kansas City, and, eventually, markets in between.
To that end it has laid out an ambitious plan to triple its assets within five years through acquisitions and by aggressively hiring bankers with established books of business. Mr. Eichner said it aims to double its banking assets in St. Louis and quadruple them in Kansas City, where he sees more acquisition opportunities.
Mr. Eichner said Enterprise needs to expand its market, its visibility, and its customer base. The larger it is, he said, the better it can sell itself as the leading provider of commercial banking and wealth management to businesses, their owners, and wealthy people.
“If we were a $100 million bank and laying claim to that, the world would have the right to laugh,” Mr. Eichner said.
Brian Martin, an analyst with Howe Barnes Investments Inc. in Chicago, said Enterprise’s clearly defined goals allow it to create strong business plans and attract talent.
“The one strength to these guys is they have a plan in place for what they want to do — they’re very well organized. I think there will be a lot of people they can bring to the table,” Mr. Martin said.
But he added that if Enterprise is to reach its goals it must show better loan growth than it did in the third quarter, when net loans rose less than 1% from the previous quarter. (Fourth-quarter numbers have not been released.)
Mr. Eichner said that with 65,000 small businesses in the St. Louis metropolitan area and 40,000 in the Kansas City area, Enterprise has room to grow. The company is also setting its sights on geographic expansion, though Mr. Eichner did not reveal where exactly.
“I would be surprised if we were only operating in St. Louis and Kansas City five years from now,” Mr. Eichner said.
In its existing markets, he said Enterprise is hiring bankers with track records of bringing in business, developing products to serve its niche, and finding new ways to reach customers.
Mr. Eichner said consolidation in St. Louis has helped Enterprise attract loan officers from other banks.
For example, it hired Jack L. Sutherland, formerly the regional president of Mark Twain Bank Kansas, to run its Kansas City operations in September 2000. This month Mr. Sutherland was promoted to chairman of the region, to free him from day-to-day responsibilities so he could focus on the expansion. (Mark Twain was sold to Mercantile Bancorp. Inc. of St. Louis in 1997).
Mr. Eichner said Mr. Sutherland had a reputation as a banker who can build assets, so the company hired him and bought him a bank.
Enterprise bought Commercial Guaranty Bancshares Inc. of Overland Park, Kan., in 2000 and put Mr. Sutherland in charge.
When Mr. Sutherland started, his bank’s Kansas City region had about $60 million of assets, Mr. Eichner said. Now it has about $260 million, he said.
Mr. Eichner said that growth in St. Louis would be primarily organic, but that he expects the company to make more purchases in Kansas City.
Stimulating organic growth is also what led to the creation of “Enterprise University.” Though the company says it charges $1,000 per course, the fees are waived for clients and potential clients, Mr. Eichner said.
Mr. Eichner said that the school has drawn interest from businesses outside of Enterprise’s two markets, and that the bank is working on deals with trade associations to bring their members to the school in exchange for access to membership lists.
