After helping to build a bank that sold last year for one of the highest price-to-book multiples in Texas history, Kenny and Kristi Koncaba are not worried about making ends meet.
But they still want to work - and make a difference - so they are forming Family Bancorp Inc. to cater to Hispanics.
"It's about developing a market that hasn't been developed: the unbanked," Mr. Koncaba, Family's chairman and chief executive officer, said in an interview this week. "Still, I believe the business will be successful. ... Our investors will see an appreciation on their investment."
Family will not be the first start-up to set its sights on the fast-growing Hispanic population, and mainstream banks have become more aggressive in courting Hispanic customers. But the Koncabas say Family is focused on educating low-income Hispanics about banking, not on making money.
A community bank with no plan to provide robust returns to investors sounds like a tough sell, but the Koncabas do not expect to have trouble raising their initial capital goal of $24 million. They have hired the Dallas investment banking company Samco Capital Advisors, and Mr. Koncaba plans to call on banking contacts he has made over the years.
"We haven't gone out to the typical hedge fund guys or folks who typically invest in community banks that want an exit strategy and quick flip," he said. "We're talking to prominent citizens who want to invest in a bank that helps the unbanked - people we have been blessed to have desire to help us with this endeavor."
The Koncabas have experience building banks. In March the husband-and-wife team left FC Holdings Inc., a company that acquired several banks along the Interstate 35 corridor with a grow-and-sell strategy. They also worked at First Community Capital Corp., which Wells Fargo & Co. bought last year for $123 million, or 5.37 times tangible book value.
Mr. Koncaba, 48, was the president of both FC Holdings and Community Capital. Ms. Koncaba, 33, was the senior vice president of human resources and the information technology director at FC Holdings. While there she oversaw the acquisition and integration of three banks this year, she said.
Last week Family announced an agreement to purchase the $49 million-asset First National Bank of Refugio in Texas. The $9 million deal, which requires regulatory approval, is expected to close next quarter.
Roughly 75% of First National's customer base is Hispanic, and the Koncabas say they plan to use the bank as a platform to branch into the "overbanked but underserved" Hispanic areas in south Texas.
As Family branches beyond Refugio, it plans to do business under the name San Antonio National Bank.
First National would continue with its normal day-to-day community bank operations, and its profits would help fund Family's outreach efforts, the couple said.
Last year First National made $150,000, according to the Federal Deposit Insurance Corp. It has a loan-to-deposit ratio of 20%, and Family plans to use those deposits to finance loans to Hispanics. Family is hiring experienced lenders like David Moreno, a former executive vice president and commercial lender for First Community Bank-San Antonio.
"A substantial amount of that deposit base could be taken from the bond portfolio and invested in loans, going from 3% or 4% to 8% or 9% interest," Mr. Koncaba said.
Jacob Thompson, a managing director in Samco's Dallas office, said his firm plans to begin raising capital around the middle of January to complete the First National deal.
Because they are still waiting on regulatory approval for that deal, Family has not started raising capital, but the early interest is promising, Mr. Thompson said. The sales pitch involving a long-term capital commitment and years of educating a market rich with potential has not proven a deterrent to investors, he said.
"They have an experienced management team and a group of what I consider to be high-powered organizers," Mr. Thompson said. "They are organizers in the San Antonio market that are well known in the community and can drive business to the bank."
In its planned initial public offering, Family expects to have about 700 investors, who can buy in for as low as $3,700. The low buy-in is meant to increase community support for the bank by allowing community members to be owners, Mr. Koncaba said.
Family has commitments of about $14 million already, he said.
State Rep. Larry Taylor, R-League City, a core investor with Family, said tying his money up in a company with a long-term strategy that may take years to show a profit does not worry him.
"Mr. Koncaba is someone I have known for many, many years," he said. "I've worked with him before on banks. I like the plan. ... It is a community service, and it is going to take some time for that to pay off."
