Former First Community Capital Corp. chief executive Nigel Harrison is wasting no time building a new Texas banking company.
The Houston holding company he founded after selling First Community to Wells Fargo & Co. 15 months ago already has $300 million of assets and is on pace to top $1 billion by the end of 2008, Mr. Harrison said in an interview last week.
And if all goes according to plan, he said he would hope to sell his new company, FC Holdings Inc., within the next seven to 10 years.
"You have to have an exit strategy," said Mr. Harrison, FC Holdings' chairman and CEO. "Investors are banking on it."
Mr. Harrison, 53, has done well by investors in the past. He founded First Community, also of Houston, in 1995, built it into a $580 million-asset company, and sold it for $123 million - 5.37 times its tangible book value.
But he is doing things a little differently this time around. His focus is less on operating a bank than on building a banking company, and his sales pitch to executives at target banks is that they will be given a lot of autonomy.
"Truthfully, I don't want to run banks today," he said. "I want to oversee banks. I don't care to micromanage."
Though it made two small acquisitions in its 10 years, First Community focused primarily on organic growth in the Houston area.
Using a San Antonio charter he retained in the deal with Wells Fargo, Mr. Harrison is building FC Holdings through acquisitions, scouting the Interstate 35 corridor between San Antonio and Dallas.
"I think the I-35 corridor is going to be the serious growth vein of Texas," he said.
Not that he is ignoring other markets. One of the three banks FC Holdings has acquired is in the outer Houston suburbs. (Mr. Harrison signed a noncompete agreement with Wells Fargo that prohibits his company from doing business in metropolitan Houston until 2009.)
FC Holdings now has four banks: the $75 million-asset Bosque County Bank in Meridian, the $22 million-asset Lake Area National Bank in Trinity, the $68 million-asset Texas National Bank in Tomball, and the $81 million-asset First Community Bank in San Antonio. All four will change their names this month to incorporate the First Community brand, though they are to retain their individual charters, Mr. Harrison said.
"Texas is a very large state. So to have a bank with a charter in Houston doesn't speak to what is going on in another community," he said. "By having separate charters, those communities have real representation in their marketplaces. The holding company provides input and back-office support."
Plans are in the works for each of the subsidiary banks to offer stock in their local communities later this year. FC Holdings would retain at least 67% of each bank's stock, Mr. Harrison said. The money raised would be used to make each bank more competitive in its market by creating higher loan limits.
Mr. Harrison's new approach is winning over bankers like Alan Morris. A 32-year banking veteran in Waco, Mr. Morris left his job as Extraco Bank's president to become the Waco market president for Bosque County Bank, which is to be renamed First Community Bank Central Texas.
"One thing is he likes to empower people," Mr. Morris said of Mr. Harrison. "He likes to hire good people who know their market and let them run it. In the banking market we are in, that has become less and less of an option, because bigger banks take a top-down approach. Nigel seeks input on how to do it at the local level."
Mike Moses, a vice president and senior relationship manager with Wells Fargo in Victoria, has known Mr. Harrison since he opened his first bank in a trailer in Houston in 1994. He watched him build First Community and said he expects him to have an even bigger success this time.
"I'm impressed with the way he runs banks and builds coalitions," Mr. Moses said. "I am impressed with the way he develops capital. And I am impressed with the way he goes about building a team and infrastructure. He is a smart, innovative banker that doesn't fit the typical mold."
