Tom Bracken, the former CEO of Sun Bancorp, has a new venture. He is the president of TriState Capital Bank’s New Jersey operations. The newly-formed bank has its headquarters in Pittsburgh, and has branches nowhere at all. As far as Bracken knows, his is the only branch-less bank in the state, and he and his partners intend to keep it that way. TriState is not a retail bank, one that seeks to do business with all consumers, but rather it is a commercial bank, and it is looking for customers only among mid-size businesses and high net worth individuals.
“Retail banking is much more of a commodity today, more than it has ever been,” says Bracken. “It’s highly competitive, and it’s very expensive.” The cost of building and maintaining branches is high, he points out, as is the cost of staffing them. “Income is reduced,” he says. “High overhead is part of retail banking.”
Still, Bracken admits, bank branches do serve important functions. For one thing, they do a tremendous job of creating visibility. Seeing a PNC or TD Bank (formerly Commerce) on every corner imprints the brand on the brains of passing motorists and pedestrians, many of whom will remember it when it comes time to finance a business venture or open a revolving line of credit.
TriState’s plan is to replace this ubiquitous bricks and mortar marketing with a more targeted approach.
“We do it through the people we hire,” says Bracken. “We only hire people with 20 to 25 years worth of experience. They’re all well known in the business and banking communities. There’s a lot of networking. They speak to accountants and lawyers.”
TriState’s bankers will never be found behind impressive desks, or if they are, it will be by their kids or by a random neighbor looking for a cup of sugar or help with a wonky modem. All of their offices are home offices, fitted out, says Bracken, with the latest in technology. As cutting edge as their home offices are, the bankers will not spend much time at them. “They will be on the road,” says their boss. TriState’s employees, of whom there are nine in New Jersey, and 100 overall, have a good reason to remain productively active. “We have a compensation package that holds their interest,” is how Bracken puts it.
Bracken was recruited to head up TriState’s New Jersey operations after the bank, which was formed in January, 2007, contacted him when he left Sun Bancorp. Bracken says that upon his resignation he received “several flattering offers, both in banking and in other industries.” He followed up on TriState’s interest, going to Pittsburgh to speak with TriState’s president, Bill Schneck. On subsequent trips he met with Jim Getz, the CEO, and with Mark Sullivan, the third founder, whose titles are vice chairman and CFO.
Bracken says that liked the new bank’s focused approach and was drawn to working with a start-up. He also says that TriState is well positioned for a good start in a difficult economy. The bank has just raised $50 million in a second funding round, and has a total capitalization of more than $150 million. What’s more, as a newcomer, TriState has no bad loans on its books.
“We literally have no problems,” says Bracken. “This environment is playing to our strength. This is a good time to have no baggage.”
The new bank is open to working with customers in any industry, Bracken says. Many early customers have been in the commercial real estate sector. Often they are looking for refinancing of office or retail projects, and, he says, TriState is generally more flexible in working with them than are larger banks.
Bracken, who has served as president of the New Jersey Chamber of Commerce, has been involved in the New Jersey banking career for all of his professional life. A native of Corry, Pennsylvania (near Erie), and a graduate of Bucknell (Class of 1969), he chose banking because in 1969 “the country was a mess. I didn’t know what to do.” An uncle was a banker. He advised Bracken to give the industry a try, saying “You’ll touch every industry. You’ll find one you like.”
Acting on the advice, Bracken joined First Trenton National Bank in 1969. He stayed with that bank as it became New Jersey National Bank, CoreStates (where he became president of the New Jersey division), and First Union. He left when First Union morphed into Wachovia (soon to become part of Wells Fargo, the third largest bank in the country).
Bracken, who says that businesses are yearning for stability and continuity in their banking relationships, has remained constant to his first career choice. He joined Sun Bancorp in 2001, and, after went to TriState as soon as his non-compete agreement with Sun Bancorp expired.
His wife, Suki, is a homemaker, and both of his children, a son and a daughter, have followed him into careers in finance.
But did Bracken, who rose all the way to the top of his industry, ever consider full-time golfing or marlin fishing when he left Sun Bancorp? His answer is quick, and unequivocal: No. He says that he was eager to continue his career by adding the one banking experience he had not tried his hand at — getting a start-up off the ground.
Retirement was an option for him, albeit one he did not consider. But he says that everywhere he goes — and Bracken gets around as do few other New Jersey executives — he is hearing that his contemporaries are staying put.
“People are saying if they were considering retirement, they aren’t now,” he says. There has been a “forced removal” of retirement from the timelines of everyone he is encountering. “They don’t feel comfortable now,” he says. “They have been severely impacted.”
“The dips in the stock market came so fast,” he says. Even the financially savvy people he meets in his industry were “too late,” and did not find a safe haven for their savings, or at least for all of their savings.
“I have never seen anything like this. Absolutely not,” Bracken says of the current financial upheaval. “Nothing that was as widespread and as deep.”
He cannot answer the “what’s next” question with any dates or events, but he has been around long enough to observe that “every cycle has a beginning and an end.” This too will pass, but, says Bracken, “we’re probably in this for a little longer than in the other downturns.”
Still, he is optimistic. “The economy of the United States has too many strengths, too many smart people. There is a lot of hard work ahead, and a lot of compromise, but there will be a return.”
He says that his bank, and the other new banks in the area, including the Bank of Princeton, with headquarters on Bayard Lane, and First Bank, due to open in Ewing later this year, are part of that return, providing jobs and getting capital to businesses.
TriState Capital Bank, 1200 Lenox Drive, Suite 105, Lawrence; 609-512-2121; fax, 609-512-2122. Tom Bracken, president, TriState NJ. Home page:www.tristatecapitalbank.com.