Shon Cass of Texas Security Bank joins Alex Habet to talk about the bank’s story, strategy, and culture; how they think about technology; and how they’re planning for 2023 and beyond in an uncertain macro environment.
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Transcript
Alex Habet
Hi, and welcome to The Purposeful Banker, the podcast brought to you by Q2 PrecisionLender, where we discuss the big topics on the minds of today's best bankers. I'm your host, Alex Habet, back for another one today.
This show has had a fairly long history in terms of podcast standards. It was arguably created during a time before podcasts were cool even, so big credit to Jim Young and Dallas Wells for launching this thing and getting it to where it is today, and where myself and others get to continue along on the journey. But what they did was they built a very diverse coast-to-coast audience. A huge part of that audience are relationship managers at banks of all sizes. So here on the show, we've always strived to produce content that is useful to our audience, especially to the RMs, whether it's tactical content, which you've been hearing the last few episodes, on especially about whether you should be using more swaps these days or thinking about fixed rates or things like that.
But one of the other things that makes this show so great for this audience is that we also bring great stories. These are the reasons I think ultimately when you package it all together, that our audience comes back and tunes in episode to episode. We are all about sharing good ideas, great stories wherever they come from. But we always try to pay tribute to what this show is really ultimately about. It's in the title of the show, a purposeful view of our world in commercial banking or even banking at large.
And no matter how good people within our four walls here at Q2 get at telling purposeful stories, nothing beats hearing directly from our clients and our non-clients alike. These are the stories from real-life practitioners. It's pretty much as good as it gets. It's as good as gold, in my opinion, which brings us to today's episode.
Now, it's not every day that you get to say hi and interview a founding member of a bank that is also chock full of purpose and loves telling the story. So I'd like to welcome Shon Cass to the show. Sean is a founding member, EVP, chief experience officer at Texas Security Bank, and probably holder of one of the longest titles I've ever seen in banking. And for those of you who are unfamiliar with Texas Security Bank, it's a relatively new bank by industry standards, right? Started in 2008, which kind of raises an eyebrow in terms of when you pick to start a bank, but that's pretty cool. That's going to be a good story I'm sure.
But the bank has grown from startup to over a billion dollars in assets by focusing relentlessly on entrepreneurs and owner-managed businesses. It's a crystal clear mission, and they've demonstrated time and time again how they go above and beyond the standard in banking to support their clients.
So Shon is a regular fixture here at Q2. He has appeared on several other channels across different product lines at the organization. Thank you for that, by the way. But it's his first time here on The Purposeful Banker podcast. So Shon, welcome to the show.
Shon Cass
Thanks, Alex, great to be here. Thanks for that buildup as well.
Alex Habet
Yeah. No, I really appreciate it. Just reading the bio before we got to meet and stuff, I had one of those, "Where do we begin?" kinds of questions. So look, for me personally, I love origin stories, whether it's in the movies or in banks, right? Yeah, I love to know how the superhero was created, that sort of thing. And that certainly applies here. So we figured let's go classic, past, present, and future, if that's cool with you.
Shon Cass
Sounds like a good plan.
Alex Habet
Yeah. So look. Let's go back to that in the intro remarks, right? 2008, not a lot of banks were founded then. So I'm dying to know, Shon, why was that a good time for Texas Security Bank to open up doors?
Shon Cass
Well, I'm not sure. It turned out to be a good time. It certainly was not part of the plan. To use your superhero analogy, we started putting our cape on in 2006, early 2007, and everything kind of came together in 2008 at the same time that the financial markets were starting to collapse. And so, I'd be lying if I said there wasn't some anxiety on our part as we leaned into that. But we were so far into the process at that point, it was, "Continue to push forward."
And then, some things started falling into our lap that you certainly couldn't have predicted with the financial issues that were going on in the market. We really were surprised at the number of investors that started coming late 2007, early 2008, that believed in what we were doing. They believed in our mission and wanted to be a part of that. And then, the story just continues from there. So again, when people ask me this question, "Why did you choose to start a bank in 2008?" We didn't decide to start a bank in 2008. We decided to start a bank earlier than 2008. 2008 was when we went across the finish line.
Alex Habet
And just out of curiosity, when did you hit that moment when you saw that, "Hey, this thing could actually work." Right? It's not all the doom and gloom in the beginning and you don't know if this thing ... When did you think, this is an inflection moment, "This could actually work." What was that like?
Shon Cass
Well, I think for most of us, that inflection point was when we made the decision to start the bank, quite frankly. It's like any good plan. We don't start with failure in mind. We started with success in mind, and we worked toward that success. Failure for me, personally, was never an option. And I'm sure it was out there and I know it was looming around us constantly, but it was never an option. Failure was just not an option for us.
And so again, there was anxiety. 2008 was a tough, tough time, 2009. But we just continued to press forward. We continued to stay focused on our mission. We were very determined individuals, as are the clients that we serve that start businesses that take sacrifices, put their capital at risk. And we figured out a lot as we went. Our original business plan was maybe not necessarily the business plan that we followed in 2008 and 2009, but we improvised, right? So we started with a good plan and then we were able to pivot along the way. So honestly for me, the inflection point was from the very beginning. Had I not believed that we could be successful, I wouldn't be talking to you today.
Alex Habet
It sounds like the mission was ... You guys kept it front and center. You kind of put on a master class and then that's kind of your guiding star. How has it really played a role in sort of the more tactical day-to day-life at the bank since then?
Shon Cass
Yeah. So mission is everything for us. We started a bank to serve owner-managed businesses. And we did that because a lot of us had owned businesses. Me, personally, had owned a business. I had worked in a family business. I believed in business owners. I believed in what they do and the value they add to our economy. And we had all come from larger financial institutions where we weren't able to necessarily serve those businesses the way that we wanted to. And so mission for us has been everything. We can't be all things to all people, but we know what we can be and we strive to be the best at that that we possibly can.
Alex Habet
That's definitely something that sets you apart, I think, from a lot of banks. But let's circle back on that in some of the more present part of the discussion. I'm curious, just what are some things that you do to serve this community above basic banking products? Do you have some examples you could share of how you all obsessively focus on entrepreneurs and owner-managed businesses?
Shon Cass
Sure. So obviously, products and services are extremely important. We've got to have the products and services that this segment of business needs and wants. But more importantly, there are other things that are maybe not product-related. One of the things that we realized early on was that business education was going to be a critical part of our mission. And so we started a Lunch and Learn series very early on after the bank started. And this was an opportunity to bring folks together to learn things that they needed to know to run the business.
A lot of our clients, they may not have a college education. If they do, it may or may not be in one of the business disciplines. If it is in one of the business disciplines, it's certainly not in all the business disciplines that it takes to run a business. And so we realized early on that these individuals needed a safe place to come and learn and sharpen their skills. And so we started providing that through our Lunch and Learn series.
I always stress that it's not a sales presentation. I see a lot of these types of education platforms, but it's more of a sales presentation for the speaker. This was never about being a sales presentation. This was about being a learning experience for our clients or our prospects. We eventually turned that into a TSB Academy, which is a 12-month program. It's a curriculum base where we bring business owners and their key players into a classroom-type environment and we go deeper into those same topics that we're going over in the business speaker series. It's been extremely well-received. We get a lot of great feedback from folks that attend those sessions because, again, it's a safe environment for them to come and learn and then take things back and apply in their business. So that is one example where we go far beyond a product or service that we sell.
Alex Habet
That's tremendous, and that's certainly ... I haven't really seen that, at least very commonly out there in the market. So I definitely think you guys might be really onto something that is really powerful, really useful. You mentioned there's often a gap in some of the more business discipline type of things you might need to know to run the business. And the way you guys are just filling that gap is incredible.
Shon Cass
Yeah. But let's keep that secret. Don't tell anybody what we're doing.
Alex Habet
Well, it's no longer a secret now, but keep up the good work. I guess that's this host's advice to you.
You were born in a digital era. I think the iPhone came out the year before you guys opened up doors, right? So look, things were still kind of in flux back then, but how has digital played a role in your bank strategy since you probably weren't dealing with a lot of the legacy overhang that a lot of banks might have today? How has that impacted the way you guys broke ground and got started, and how does it affect your branch strategy overall? Right? Because you've got to think about both in this case.
Shon Cass
Yeah. So that's a great question. And the digital strategy has definitely been progressing and building over time. But early on, I think we did know that technology was going to play a big role in the future of our bank. I have been doing this a long time. I've been involved in a lot of different organizations, a lot of different formats. And one example early on was remote deposit capture, which is not a new technology, but we had an opportunity to really leverage that technology maybe better than I was able to at previous organizations by deploying more scanners and keeping our branch footprint a little bit smaller.
Over the years, that's evolved into what we call a branch light strategy. And because of the digital technology, we can serve our clients all across the Metroplex, quite frankly, all across Texas and even some other states with that digital footprint. And it's allowed us to do that with a smaller branch network and not all the infrastructure maybe that we would need if we didn't leverage that technology.
And the reality is, our client base wants that. The majority of our clients want to do those transactions electronically. They're not willing to come to the bank and stand in line and do teller transactions. And so it's what the client wanted and it was really kind of a unique opportunity based on the time that we opened to kind of lean into that a little bit more than maybe we would have in the past.
Alex Habet
Awesome. So let's take now a step out of maybe the past and talk a little bit about some of the things going on today, a little bit of the present, right? So it was abundantly clear to us here on the team that the culture is a big differentiator for TSB. Am I using the right acronym, TSB? Yeah.
Shon Cass
Yeah.
Alex Habet
It's a big differentiator for TSB. How do you build, or what's your perspective on building a great bank culture?
Shon Cass
So culture is incredibly important. It's a passion of mine, quite frankly. Our whole entire bank, just to step back to the past a little bit, our bank was built with a good plan, a lot of hard work, and a lot more divine intervention. And so, going back to kind of our beliefs, people are extremely important. We can't run our organization without the people that choose to come and be a part of the organization. And so, we try our best to lean into those people as much as possible.
And so I could spend a lot of time talking about this and would love to, because it is again a passion, but early on we created an internal committee, culture and value committee. And it was a group of volunteer employees that spend their time finding ways, creating ways to continue to build our culture. That culture is really built around our mission, our vision, and our values, right?
And all of us have worked in organizations that had value statements. Those value statements were hanging on the walls somewhere maybe in the break room. For us, that's a living, breathing document. When we gather for a meeting, whether that's two people or 10 people, we start that meeting by talking about one of our values. We describe the value and then we give some anecdotes. We do the same thing every time we come together for a quarterly team meeting; we talk about those values. Those values are baked into our performance appraisals. They're baked into everything that we do in the organization.
And so, that along with continuing to keep the mission alive, continuing to make sure that everyone understands the vision of the organization, there's a lot of transparency in our organization. We share financials with our entire bank on a regular basis. We want everyone to understand where we're headed and what it's going to take to get there, and more specifically, what role they play in getting us there.
And so, culture is everything for us. And I think that's also helped us weather the recent storms of the Great Resignation. A lot of folks had people leaving. A lot of companies were struggling with staffing. And it's always been a belief of mine that those people didn't leave to go be unemployed, they left to go find an employer that gave them purpose. And so that is something that we try very hard, is to provide that purpose to all of our staff, in every level, in every job, making sure that they understand what role they play in our future success.
Alex Habet
Well, I'm certainly glad I invited you to The Purposeful Banker podcast. That fits in very nicely, and that's a great story. And you're spot on a lot of those things, right? People aren't quitting just to be unemployed. Yeah, it's purpose-driven. It's super important.
Shon Cass
Yeah.
Alex Habet
So shifting real quick to yourself and your role today, I've got this list here of kind of the areas that you're involved in, which is pretty wide. So I see here you oversee treasury sales, support digital banking, customer service, deposit operations, and payments, which is a wide gamut. Is this bundling intentional?
Shon Cass
Yeah, it is intentional and it is a wide gamut. And for others that may be listening to the podcast that are part of a community bank, you understand we wear a lot of hats, and it's just the nature of the beast to wear a lot of hats. Anyone that knows our CEO knows that everyone in the organization wears a sales hat. So a lot of my job responsibilities are operational, but everybody in this organization wears a sales hat. If we don't continue to add new business, then really everything else, I'm not going to say it doesn't matter, but adding new business is kind of the scorecard.
So back to your question of putting those things under one umbrella, that was very important to me. And it was very intentional because I wanted to make sure that my clients did not experience things that I experienced as a business owner, and also things that I probably put them through at other organizations when they had a problem that involved multiple departments. Those issues had to be shifted around the bank to those multiple departments. It was very important to me to put those under one umbrella to make sure that those departments were managed consistently, the mission and the vision was executed consistently, and also to make sure that those team members worked collaboratively as teammates.
And some may understand that even within organizations that I've worked for in the past, when it came to serving a client, it seemed like maybe some other departments didn't quite understand we were on the same team. And so it was important to put those together to make sure that we serve the client. The end result was serving the client. Make sure that we executed well when it came to serving the client, whatever that is. Whether it was onboarding that client, whether it was taking care of a current issue, making sure that those folks all had one purpose in mind and that is to serve the client.
Alex Habet
So, just to pivot on a somewhat tangentially related topic, right? This is something we talk a lot about on our show here. It's a challenge we see with larger banks is, now we're getting a little bit tactical here, but how do you unify the deposit and the treasury side with a lending side, we say both sides of the balance sheet? How do you deliver that? What are some things that worked well for TSB, maybe some advice you would give to some other institutions out there? Because you do have to wear many hats, you're always selling, but then you also have to think, "How do you just bring the teams together working together to deliver on these?" Any insights you'd share on that?
Shon Cass
Yeah. I think a lot of it goes back to what we talked about with culture, is with a strong culture, making sure that everyone understands the mission and the vision makes it a lot easier to build synergy, right? When everyone understands the ultimate goal, everyone works toward that ultimate goal. Now, I don't want to lead anybody down the path that it's all roses for us. It's not. There is tension sometimes and there is stress, but ultimately, they're working together to achieve that goal.
One of the things I did is I created a support team. And this again came out of experience in my past of working in both retail banking and commercial banking, is I wanted to create a support staff for our lenders so that when our lenders went out to have conversations with a prospect or a customer, they had someone that they could take with them that was a treasury expert, that was a deposit expert, that could come alongside them and be a support to them. Understanding the entire time that client or that prospect was a responsibility of that lender or that relationship manager, but we're there to support and serve them and ultimately make sure that when they do come on board with us, a prospect comes on board with us, that we've not just replicated maybe what they have at their current bank, but we've done some needs analysis, we've looked for solutions that maybe no one has talked to them about, we've been a trusted advisor to them to help them run their business better than they might be running it today.
And so that's worked really, really well. To work well, you have to execute. Those support people have to have service-level agreements. They've got to make sure that they hit their targets on behalf of the lender. And so far that's worked really, really well.
Alex Habet
That's great. So if it's OK with you now, why don't we pivot a little bit to the future? So it says here, I don't know if plans have changed since we gathered these notes, but currently there's 80 employees at TSB with plans to add 20 in 2023. So 25% growth, that's pretty big. So tell me about the growth strategy in general that you guys are planning for.
Shon Cass
Yeah. So we're actually up to 90, so we've kind of achieved half that growth goal. And yes, a lot has changed in the world since we set that original expectation. But for us, growth, we are a growth-oriented organization, so everything we do is based on kind of a growth projection. So we knew that we needed to bring folks on board. A lot of those new-hires were on a production standpoint, but a lot of them were also support and infrastructure.
One of the things we also did was we knew that to recruit at that level and to continue to recruit at that level, we had to bring on an internal talent acquisition manager. And so that, again, was a big commitment to bring someone on staff inside of our culture to help us go out and recruit those positions. And so everything we do is growth-oriented. There's kind of no plateau for us and continuing to press forward. But yeah, a lot changed in the world from the time that we set that original expectation.
Alex Habet
So let's piggyback on that. Separate from personnel at this point, are there any specific initiatives you all are considering now in light of the current uncertainty in the economy? Are there new pivots that you're looking at in one area versus another that you'd care to share about?
Shon Cass
What I would share, yeah. There's a lot of pivots. One is just continuing to do what we've done and to do more of it. And that's a very general answer. Deposits are obviously crucial to the organization. They're crucial to every bank that's on this podcast today. We've got to continue to be very good and execute on deposit acquisition.
One of the things that we did a few years ago is we created, which is kind of where my sales team comes into play, I created a Deposit Acquisition Team. And so they're out there every day for the last few years making contacts, putting prospects in the pipeline for deposits. And so I know that I certainly didn't coin this phrase and many people on this call have heard of this in their career, "Deposits are king." So the more deposits that we can generate organically, the better that we're going to execute and the lower our cost of funds. And so, that's one. We continue to keep our foot on the pedal for deposit acquisition. Is that challenging today? It is. Obviously, with rising interest rates, competitive interest rates in the market, that becomes a little bit more difficult. But we also look for ways of doing that through operating accounts, treasury services, and things of that nature.
Loans, no different than any other organization. We've got to continue to grow loans and those loans have to perform. So I say sometimes, "Getting a loan is an easy part." It's not. I understand. But making sure that we get quality loans that perform and we price them as well as we possibly can. And that also, I think, ties back to what you said earlier about the collaboration between the support team and the lenders, is making sure that when we are looking at relationships and we are pricing deals, is that we are looking at that relationship holistically. We're looking at it not only from the value that it brings to the bank from an interest rate standpoint, but also what's the value it brings to us in a deposit, in treasury management fee income. And so we're able to look at those holistically.
And last but not least, another passion of mine in line with culture is service. We've got to continue to serve our clients well, serve them better than they expect to be served. That's really kind of our motto is, "Good enough is not good enough." And so, we need to make sure that in every interaction with that client, that we are doing everything we can to go above and beyond what their current expectations are.
Alex Habet
That's great. So, you're actually going to be joining us this week to discuss on a webinar some topics specific to that impact of budget planning season, right? Because this is an important part, right? And so, since we're talking about the future, out of all the things, if you could again give us a peek behind the curtain at TSB, what's kind of an overall process that you would describe to distill the things you all want to do in the future, down to some tactical things? How do you guys look at the certain projects that you want to invest in or devest out of, I guess? What are some tips you'd give to the others listening to the show who are entering into the same thing, without, of course, stealing the thunder from what you'll be sharing with us here in the webinar? I don't want to do that, but just maybe a preview version of that. Anything you would share along those lines?
Shon Cass
Yeah. So I appreciate you bringing me kind of back to that thought I had in my head, is we are in uncertain times right now. A lot has changed, as I said, in the world. A lot has changed in our economy. But again, we have to continue to look into the future, and not just today, not just next year, but we've got to look further down the road. And so for me, personally, I am kind of responsible for the digital strategy of the bank. And so I'm looking at, "What are the things that I can bring on board that are going to continue to differentiate us in the market, that are going to continue to give us a competitive advantage with our clients and really to solve their problems?" The ultimate measuring stick is, "Is it solving real problems for our customers?"
In addition, a lot of that technology also creates efficiency within the organization. And I think sometimes that aspect gets overlooked a little bit, is you've also got to ... I've got to look at all this technology and say, "One, what problem is it solving for my customer? What problem is it solving for us as an organization?" And if those two can marry together, then that's definitely a go-forward project.
And we also have to stretch ourselves a little bit. We have a limited number of resources, whether that be time, talent, or treasures. But we've got to continue to stretch ourselves past our comfort zone to ensure that we stay relevant with those products and services, both that service internally and externally. So for me, it's kind of, again, foot on the gas pedal. Now is not the time to slow down and take the cautious approach. For me, now is the time to build. Now is the time for me to continue to add that technology, creating, again, efficiencies for our clients and efficiencies for the bank. So I hope that answered the question.
Alex Habet
Yeah. It's like a good inflection point. It might be one that's a little bit under the radar because people are just too busy worried about the fires that might be brewing, and you're just like, "No. Let's figure out what that springboard looks like when we get a little bit more clear out there in the economy. We'll be positioned in a much better way."
Shon Cass
And we're fortunate, again, to have that mindset because, again, go back to the beginning of our bank. Although we started prior to the 2008 and 2009 crisis, we plowed through that as well. So we've had adversity in our 15 years, and this is just another one of those hurdles that we have to overcome. And I kind of live by this motto, which, "This too shall pass." And when it passes, I don't want to be trying to play catch up. I want to use this as a springboard, which has, again, been a little historical for our organization.
Alex Habet
Yeah. Yeah. Well, keep up the good fight. That's awesome to hear. I guess I have one last question for you in this section. Any words of wisdom that you would give to the everyday relationship manager out there? What would you tell them? Obviously, you don't know where they all work, but what would you tell them to ask of their institutions, right? What would be some advice around there? How could they, for example, be helped to do their job better, more effectively? What are some things to look for in client relations? Just general, what's some good advice you would give to a relationship manager out there based on your experience at TSB?
Shon Cass
Yeah. So that's a big question. I think, again, and all of us I think know this, so nothing I'm going to say is going to be earth shattering or rocket science. It's a long play. It's a relationship play. And I do see a lot of times that relationship managers, even my own treasury sales people, they get a little defeated when maybe they don't get a deal closed right away. Do the right thing for the client. Build a strong relationship. Be there to serve, right? First and foremost is be there to serve them, not serve yourself.
And then, make sure that you've got the resources internally to support you. Make sure that you're nurturing those resources. I've got lots of sayings, but you get more flies with honey. And so make sure that the people around you that are there to support you feel your appreciation and respect, and you will be surprised at how much better they serve you when they feel that appreciation and respect.
And so I don't know if that helps any. Again, it's not only having strong relationships internally, but make sure you're building strong relationships externally. And they can't always be just self-serving for you or for the organization.
Alex Habet
Well, we certainly appreciate that perspective. Shon, thank you again for sharing Texas Security Bank's story with us. We certainly hope you'll come back and see us one day. These are the kinds of interactions that we think our audience values the most. So again, thank you on behalf of Q2 and the PrecisionLender team and the team running this podcast. I hope this was a fun experience for you as well.
Shon Cass
Yeah. Thanks so much for having me. And based on your responses, I may not get an invite back, but if so, I'd love the opportunity.
Alex Habet
Well, and to those of you out there, don't forget, Shon will be joining the rest of the Q2 team in the webinar coming up. Stay tuned on that information. But with that, I do want to make sure and thank all of our audience as always for tuning in.
If you want to catch more episodes of The Purposeful Banker, subscribe to the show wherever you like to listen to your podcasts, including Apple, Spotify, Stitcher, iHeartRadio, and more. And we always welcome your comments on any of these platforms. You can also head over to q2.com to learn more about the company behind the content. So with that, I'll leave it there. Until next time, this is Alex Habet and you've been listening to The Purposeful Banker.
