Contributing Writer, DBJ
(Former Union Planters executives Willis Frazer and Freddie Britt are starting a new bank in the North Delta)
Covenant Bank, a new community bank organization, located in Tunica and
Coahoma Counties, will open for business this fall. Once open, the result
will be the culmination of events that began with an innocent evening jog.
On a moonlit night last fall in his hometown of Clarksdale, banker Freddie Britt went for a run to ponder a problem and to think about where his career was headed. Concerned about the trend toward corporate rhetoric in banking as a result of acquisitions and mergers, Britt pondered his career with Union Planters in Clarksdale where he worked for 13 years - where the corporation was heading and if he actually wanted to be a part of a large corporation.
"As I was running, and mulling the situation over, I had the inspiration to start a bank," says Britt. "All I knew was banking and I didn't want to leave the Delta, which has been home all of my life, but I was no longer comfortable with the challenging corporate changes I had witnessed in larger organizations. By the time I finished my run, I had really gotten excited about the idea of starting a community bank in the Delta. I called my friend Willis Frazer (also a banker at Union Planters) the next morning and said 'let's ride to Tunica.' He knew something was up."
After discussing it with Frazer and after much contemplation on both sides, the two further investigated the possibility of starting a bank by paying a visit to a mutual contact, an attorney in Memphis who had also started a bank.
"He gave us good advice," Britt said. "He suggested that I determine if there was any interest locally, give them the ball and let them begin working on the project 'and that's exactly what happened."
During the months preceding the announcement, one organizer suggested including Tunica County in the bank system. Since Britt had worked for Production Credit Association there, it was a natural fit.
"This will not be a Clarksdale-driven bank with branches in Tunica and Robinsonville," said Frazer. "Covenant Bank views all three communities vital to its success. Administrative offices will be located in Clarksdale, but other than that, we want people in Tunica County to realize they will be equally as important to this organization."
The decision to start the bank was made on the heels of the series of articles written about the Mississippi Delta in the Clarion-Ledger, says Frazer.
"Obviously, we read the stories and were aware of the unique challenges in the Delta. But we chose to look on the positive side," he said. "There are so many pluses to this area and we're capitalizing on that."
As word spread to investors and organizers, the team began to grow.
"The way this chapter has unfolded has really been unbelievable," says Frazer. "Freddie and I recently read over our original list of potential investors and realized we were ten days in the project and hadn't even had time to review the sheet. As we went over the list, we realized a number of them had already beat us to the punch by calling us first."
Charles Neel White of Clarksdale, one of the original organizers providing capital for the banking venture, said it shows an economic confidence in Coahoma and Tunica Counties.
"It will give consumers additional choices and personalized services," White said.
Other original investors include Mike Chaffin, Bowen Flowers, Cliff Heaton, Shaw Johnson, John McKee, Rives Neblett, Andy Carr, Hamp Bass IV, and Joe Noe of Coahoma County; Bert Robinson of Robinsonville; and Paul Battle, Richard Melton, Ken Whittington, Brad Cobb, Jimmy Eubanks and Dutch and Nancy Parker of Tunica.
"We had two community banks here in Tunica that were owned locally and both of these were sold to outside interests," says Dutch Parker of Tunica. "We have really missed that personal touch. The people here in Tunica have really had a tough time reaching the management trying to have an understanding of how to do business with those banks. We felt that the time was right to start a bank that is locally owned and controlled. I have never seen so much interest in my life. People have really responded favorably."
Rives Neblett, another organizer says, "It's not every day that you can tap two of the Delta's top banking executives to lead the team. From the overwhelming support of the people of Tunica and Coahoma counties since the announcement, I am convinced more than ever that the time is right for a new homeowned bank to serve our needs."
The company cannot sell stock because it does not yet have subscription privileges.
"We targeted $5 million in capital with a maximum of $8 million," says Britt. "We now have $8.5 million in non-binding commitments and have raised our expectations from $8 million to $10 million."
Soon after a contract was signed Jan. 31, Frazer, 48, and Britt, 45, gave notice to Memphis-based Union Planters Bank, where both had worked for 17 and 13 years, respectively. Frazer was CEO of the Clarksdale region and Britt was senior lender and executive vice president of the Clarksdale region, an area that encompasses roughly $630 million in assets throughout the north Delta and eastern Arkansas. Union Planters Bank is a $32 billion regional bank.
"Chester Curtis and Willis Connell (former executives at Union Planters in Clarksdale) had such a huge impact on us in the banking arena," Frazer says. "They brought us in and were real role models, showed us what integrity meant. The timing of this new venture was uncanny. Chester retired several years ago. Willis retired last year. We would never have considered doing this if Willis was still CEO of the bank because we felt so strongly toward him. Union Planters was good to us, and we never expected to leave, but when opportunity knocks, you have to open the door and listen."
Years ago, timing had also played an important role in Frazer's life. He and his wife, Jodie, were living in Memphis where Frazer, an Ole Miss grad, had worked for KPMG, a Big 8 accounting firm and First Tennessee Bank. The couple had been married for eight years and did not have children, he said.
"I saw a golden opportunity to go back home to Clarksdale, where I grew up," Frazer said. "Opening my own accounting practice was the ticket. Starting out, the going was rough, but we had faith and were very much involved in First Presbyterian Church. Through a series of events and contacts through the church, we were able to adopt our first two children. That would not have occurred if we had not moved home. Years later, we were blessed with a third child."
The Frazers' three children are Willis, 15, Mary Randolph, 13, and Benjamin, 6.
"As a child growing up, I watched how my dad, then president of Coahoma Bank before it was bought by Sunburst, and later DG, so successfully took care of all of the local people in Clarksdale on a personal basis," said Frazer. "That made a strong impression on me."
Britt, who calls himself "just a Delta boy," was born in Cleveland, raised in nearby Benoit and moved to Clarksdale as a teenager. His wife, Valerie, was born and raised in Clarksdale. College buddies enticed him to study business at Ole Miss, and after a stint at First National Bank, he worked with Production Credit Association in Coahoma and Tunica County for almost ten years as an agricultural lender during the turmoil of the 1980s when the farming economy was depressed and many mergers and acquisitions were taking place.
"As a result of my background, and the important part of the economy it plays in the Delta, agriculture will play a major, major role at Covenant Bank,"' Britt said.
The Britts, who remain very active at St. Elizabeth Catholic Church of Clarksdale, have four children; Ashley, 18, Austin, 16, Adam, 11, and Andrew, 8.
"Freddie and I have such different personality traits, but we work wonderfully as a management team," said Frazer. "We've laughed about how our strengths and weaknesses play off each other."
Deciding on a name for the bank was easy, Britt said.
"A covenant is a promise," he said. "Willis and I feel the name delivers such a strong message about the kind of relationships we want to have with employees, customers and shareholders. We promise to treat customers like they want to be treated; personal service with a human touch. We want folks to come into the bank and say, "Y'all said you were going to do this and you did."
The team's top priority is selecting locations in Clarksdale, Robinsonville and Tunica. They plan to be in business by Sept. 1, subject to regulatory approval. The full service bank will offer Internet banking through the reserved URL, www.covenantbank.net, and other conveniences customers are accustomed to from larger banks. When all three locations are running at capacity, about 50 Deltans will be employed.
"Analysts said we'd end up with five or six big banks after all the mergers and acquisitions," Frazer said. "The opposite has occurred. In the last 20 months, eight new community banks have opened in Mississippi. It's not only happening here, but across the nation. People want to feel good about themselves and the people taking care of them."
Last year, Mac Deaver, executive director of the Mississippi Bankers Association, said community banks were popping up all around the state.
"We went for years in Mississippi with having a new charter once in a blue moon, but now we have several new charters and the ones that are coming on line are doing well," he said. "One reason is that mergers have removed a lot of hometown institutions. In some cases, the desire of local investors to have a bank based in their own community has resulted in the pooling of resources and going through the necessary regulatory procedures to get a bank charter."
Deaver said the cyclical process is primarily based on the economy.
"When the economy does well, communities do well economically," he said.
"No doubt it is an exciting time to be in community banking," says Britt. "We look forward to the coming months, and once open we look forward to serving our region of the Delta with our banking services that will be second to none."