Kayode Martins Ajewole
On March 2nd, the CRMER Student Fellows met with Rob Stitt, President and Founder of Community First National Bank. Rob graduated with a degree in Management from Kansas State University in 1986. With his experience in the banking industry as a former bank employee and later as a founder, he was able to have a great discussion with the CRMER Fellows on the risks involved in banking.
As the meeting started, Rob first spoke about his early years after leaving college. He discussed how he took a great risk he never thought he could do, resigning from the post of Credit Analyst in one of the commercial banks and co-founding a new bank from scratch. He founded Community First National Bank 15 years ago, and he emphasized the challenges involved in running the commercial bank. Community First National Bank got approval to open in March 2000, but officially opened in February 2001. The first major challenge he faced was how to raise capital. Rob also noted that most vital risk mitigation strategy involves having the right people working for you. He started his bank with six employees, and even with the bank’s growth Rob still believes in the culture of hiring like-minded people. The Community First National Bank is into different banking activities, but its major focus is on loans.
This was a very interactive discussion, with a variety of questions asked, and Rob responded with detailed answers. He also noted that most people in the banking industry learn more in their first year of the job than in their entire career. As a credit analyst, you are in position of decision making and you also bear great responsibility for most of the risks involved. A credit analyst lends money to people, and he/she has to make sure that he has all the necessary information that can assure him/her that the loan is for the right person.
Rob also highlighted the challenges faced by banks nowadays. Staying ahead of regulation is a big risk to the bank. He noted that over-regulation has made it more difficult to do business. Over-regulation affects the entire commercial bank industry, as it limits people getting into banking. There are about 34 percent reduction in numbers of commercial banks compared to when Rob started operation in 2001 (8,080 commercial banks then). Another challenge is finding good staff, especially in the ever changing business environments. Also, keeping up with changes in technology pose a big risk to banks. The most important aspect of being an entrepreneur is that they takes risk on their own, but with this risk comes rewards. Rob told the group that he started saving after college, and his savings gave him the advantage of being able to put over $100,000 into the bank at the outset.
Before the end of the interactive lecture, Rob went into detail on the biggest risk involved with loan portfolios. Each borrower has to be treated different because of their diverse background. He also helped the group realize that there are a lot of good entrepreneurs, but that they often lack accounting skills. Some lucrative businesses file for bankruptcy because of bad business management practices. As a lender, Community First National Bank works with their borrowers to limit financial mishap.
Rob’s message goes beyond banking alone, including general business advice, and how to survive in business. He advised that Student Fellows should pay attention to their credit reports, develop good communication skills, find a mentor in the fields they are going into, and always seek out opportunities to network.