Back in 2008, a group of bankers in Birmingham teamed up to launch Oakworth Capital Bank, a financial institution targeting the region’s most successful families and individuals, and privately held entities, including medical, attorney and accounting practices.
Fifteen years later, with offices in Birmingham, Mobile and Brentwood, Tennessee, Oakworth Capital serves clients in 17 states and is now expanding its footprint to the Carolinas in what CEO and Chairman Scott Reed says is a move toward Oakworth’s “BHAG” or Big Hairy Audacious Goal.
“Our BHAG is to become one of the iconic brands,” Reed says.
“We went to Nashville about two years ago and that was a really important move for us because we really wanted to test our approach in a market that’s considered a high growth and dynamic market, and the results in the feedback have been fantastic,” he says.
“The Carolinas is the next step in executing on that goal of becoming an iconic brand. It’s another market that’s very dynamic. It’s very fast growing, and we believe our approach to the market will be well received,” Reed says.
As one of Oakworth Bank’s founders, Reed says the company views itself more as a financial services company than a bank, since it provides not only private and commercial banking, but wealth management and advisory services as well.
“Our advisory services include financial and estate planning for individuals, as well as valuations and succession planning for businesses,” he says.
The basic tenet of Oakworth’s approach to working with clients, and the cornerstone of their service model, is that every client is assigned what is called a primary client adviser, he says.
“The role of that adviser is to coordinate all of our disciplines for the benefit of the client,” Reed says.
Oakworth Capital Bank recently announced it had wrapped up 2022 with a 47% increase in core earnings and a 34% increase in its core revenue.
The bank also reported a net income in 2022 of $11.5 million with total revenue reaching $51.8 million and earnings per share at $2.36 on an adjusted, diluted basis. That figure was up from where it was in 2021 at $1.62 per share.
For its 2022 revenue growth, the bank credits a 27% rise in net interest income — 43% when excluding 2021 PPP fees — and a 10% increase in wealth management fees. Moreover, at the end of 2022, Oakworth reported wealth assets of $1.8 billion and deposits 7.5% higher than in the previous year.
Oakworth also reported $0 charge-offs, $0 non-performing assets and $0 90-day past due loans as of and for the year ending Dec. 31, 2022.
Forest Whatley Jr., Oakworth Capital’s senior managing director and chief performance officer, says the company’s careful approach to extending credit is one contributor to the bank’s strength.
“Our focus has been to grow the organization while maintaining sound and solid credit quality. A key to our solid credit quality history has been really knowing our clients. If it’s a business, we take the time to understand the industry in which they operate.”
Whatley says Oakworth Capital has experienced client advisers, lenders and a dedicated credit analyst.
“We certainly are creative with our clients in how we may structure a credit opportunity, but we don’t compromise on sound credit fundamentals,” Whatley says
Oakworth Capital added a new perk in 2022, when it began for the first time publicly trading on the OTCQX Best Market under the OAKC symbol. According to Oakworth FAQ page, the OTC Markets Group Inc. platform is designed to be an efficient way for Oakworth’s shareholders to buy and sell Oakworth shares, and they can make transactions through most brokers instead of having to locate buyers and sellers on their own.
“It provides a much smoother trading experience for our shareholders and prospective buyers of the stock,” Reed says.
The bank also has racked up a number of accolades over the years. By 2020, Oakworth Capital had made Inc. magazine’s annual Inc. 5,000 list of the fastest growing private companies in the United States four times.
Then last year, Oakworth earned a top, five-star rating from BauerFinancial, an independent bank rating firm, based on the bank’s Q4 2022 financial data. The rating looks at factors such as account profitability, loan delinquencies, asset quality, reserves and regulatory compliance.
With Oakworth Capital’s financial success, the bank is moving forward with its plans for expansion, which Reed says is key to the goal of becoming an iconic brand.
Oakworth first expanded to South Alabama in 2015 with an office in Mobile. Then in 2021, the company opened a branch near Nashville. Now it plans to open a new office in Charlotte, North Carolina, later this year.
Whatley oversaw efforts to hire a market leader and the associates to run the branch there. Last September, the company announced it had hired banker Tim Beck as the Central Carolinas market leader. Whatley says they are now prospecting for new clients and looking to grow the market share there, he says.
“Our marketing is accomplished through the business development process, through one-on-one conversations, from our associates being visible and active in the market and is supported by a strong digital marketing campaign where we have a digital marketing presence,” Whatley says.
Regulators forced SVB, which served the tech industry, to shut down after the value of bonds in which the bank had invested fell and nervous depositors began withdrawing their money in a panic. Afterward, anxious depositors at Signature Bank started withdrawing their money.
To prevent further panic, the Federal Reserve Bank took several actions, including partnering with the Federal Deposit Insurance Corp. (FDIC) and the Department of the Treasury to ensure that all SVB and Signature depositors would be able to access their monies even if those deposits were over $250,000, the maximum amount normally insured by FDIC.
Reed says the news made a few Oakworth Capital clients uneasy.
“We certainly had a handful of conversations with clients who really just wanted to get reassurances that we weren’t in a similar situation that Silicon Valley and Signature were in,” Reed says.
Oakworth limits its risk by keeping its total investment portfolio at about 10% of total assets, he says.
Looking back over a decade of change at Oakworth Capital and in the banking industry, Reed says he is most proud of Oakworth’s positive impact on its clients and their associates and is appreciative of the communities where the bank operates.
“The growth that we’ve been fortunate enough to be a part of is really just a by-product of having good people and saying, ‘Look, just do the right thing, day in and day out,’ and people will recognize that and the company will grow because people are attracted to that sort of thing.”
Gail Allyn Short and Joe De Sciose are Birmingham-based freelance contributors to Business Alabama.
This article appears in the May 2023 issue of Business Alabama.