“The New Year represents a time of reflection for most of us. It offers a moment to evaluate important aspects of our lives. For some, that’s thinking about relationships with family and friends. For others, it could be evaluating your career. For many, it’s reflecting on health—both personal and financial.
I use this time of the year to think about how we are fulfilling our mission at Fourth Capital. To do this, we take a deeper look at how we are living up to our core principles, one of which is foundational to everything we do: mutual benefit. Our bank is built on the idea that we only succeed when our customer—the Middle Tennessee community—succeeds. That means we’re not thinking about how we can squeeze dollars out of our clients through a short-term transaction, for example. This may sound strange, but our goal is not to make money. Rather, as a privately-held and locally-owned bank, we are focused on long-term value creation for our customers where we achieve mutual benefit for everyone involved for years to come.
In Middle Tennessee, over 50% of all deposits are held by publicly traded banks that are headquartered out of state. These gigantic corporations may have brands that are familiar but their leaders aren’t focused on our community, which means they don’t have a vested interest in strengthening the place we call home. In fact, they not only don’t see the community as a customer or key stakeholder—their customers aren’t even their deposit holders. The true customer of a publicly traded bank is the shareholder; many of whom are large, institutional funds run by Wall Street. This goes for the publicly traded banks that are headquartered here as well.
This has significant implications that we are seeing play out in real time. Before the Fed raised interest rates to battle inflation, publicly traded banks were not seeking your deposits as there was so much liquidity in the market. Now, we’ve seen rates rise, liquidity has dried up, and publicly traded banks chased deposits to shore up year-end financials with offers that will pay nothing again when the banks decide they no longer have use for them.
Why? Because the focus is on the shareholder and not the client and the community. They are strictly seeking profit so the shareholders can have a higher stock price. Their clients are simply along for the ride.
As more and more publicly traded banks target Middle Tennessee, what will the future look like? Do we all want to be along for the ride as a number that helps a gigantic corporation; likely one where we’ve never actually met a person, hit their financial goals so shareholders can prosper? Or do we want to know the person handling our life savings and helping us grow our business is someone who shares a similar love and commitment to the place we call home and is thinking about how both of us will succeed in the future?”
-Brian Heinrichs, Fourth Capital CEO