Q & A with William Smith, Jr., President and CEO of Capital City Bank Group, Inc.
by Boardroom Brief on March 07, 2011
1. In 1989, you were appointed president and CEO of Capital City Banking Group (CCBG), one of the largest financial services companies headquartered in Florida and the holding company for Capital City Bank. Your company provides a full range of commercial and retail banking products and services from 70 banking offices, one mortgage lending office and 79 ATM’s throughout Florida, Georgia and Alabama. How has the bank grown and expanded under your leadership?
Since 1989, Capital City has grown from $626 million to $2.6 billion in assets and our office network has expanded from 26 to 70. This was accomplished via organic growth and acquisitions. During that horizon, Capital City completed eleven acquisitions including whole banks and deposit assumptions. Our leadership team developed a business line driven bank with market representation. Our main task was to make sure we had managers who had grown up in the bank, with appreciation for our history and the intellect and skills to manage a much larger organization. When I joined Capital City we were under $100 million in total assets, but it was easy to see we needed managers capable of running a more complex organization. Making sure we brought in new folks with different skill sets to complement our long term management team was critical. Gunster was at our side during this growth and expansion and their thought process and legal work was instrumental in making the transition smooth.
2. When many banks are suffering, especially in Florida where we led the nation in bank failures in 2010, last month Capital City posted a 4th quarter profit, its third consecutive quarter of positive earnings. How has your conservative growth strategy helped you not only remain stable, but gain in strength during the financial crisis?
The last few years in the economy and the banking business have been challenging. After a tough start in 2010, we ended with lots of momentum and growing profitability. Blessed with a strong capital base, our regulatory capital ratios have improved from 2008 to 2010. This was accomplished without taking TARP or diluting our existing shareowners by raising new capital. The markets we serve have been slightly more stable than most. Capital City has benefited from the strength of those communities.
3. Headquartered in Tallahassee, Capital City Bank has locations in anchor cities through the state, but as a ‘hometown’ bank is serving a host of small geographic areas throughout the state in small town America. As a CEO of a leading Florida institution, you were invited to sit on The Florida Council of 100, the forum of business leaders which have a positive effect on policies enhancing the economic well being of Floridians. Given your unique perspective, as we head into 2011, are you seeing any momentum building in the recovery in Florida? Do you believe the worst is behind us?
Our strategy is a good bit different than most banks and particularly those headquartered in Florida. With three anchor markets, Tallahassee and Gainesville, Florida and Macon, Georgia, most of our franchise is located in smaller towns in Florida, Georgia and Alabama. Our anchor markets have similar characteristics: an interstate highway, about 200,000 residents, a big education/government employment base and a significant medical component. Our smaller markets are generally less than 25,000 in population; are anchored by local government, usually a county courthouse; a collection of downtown churches and high school football. In these towns our bankers do a lot more business outside the bank than inside. Capital City bankers really need to be the glue and backbone of these communities. Our bankers tell us the economy is improving, but they are still worried about local government budgets. My story on the economy is we are in the plane; it is coming in for a landing; we can see the lights on the runway for the first time on the flight. The lights are not very visible yet, as there is still cloud cover and fog between the plane and the runway. The flight has been bumpy and we have thrown up several times and might throw up again on the way down, but we can see the lights on the runway for the first time.
4. When you say you grew up in the business, you meant you were literally raised in the boardrooms of Capital City Bank. In fact, when you were appointed president in 1989, you took over the position from your father, Godfrey Smith, who was retiring after more than 50 years of service with Capital City. Moving forward in a time when the public’s confidence in banking has been shaken and online banking is on the rise, why is it more important than ever for customers to build a relationship with their banker and seek out an institution with an exceptional reputation within the industry and throughout the community?
I did have the good fortune to grow up in the bank, both figuratively and literally. My dad worked for Capital City for almost sixty-three years and I came back to the bank with him every night when he returned to work after dinner. To say I learned math, spelling and came to the attention of management at an early age is not an exaggeration. Having the opportunity to work for twenty-one years with my dad, who was my best friend, was one of my greatest thrills. To sign my dad’s paycheck was something I never imagined would happen. The lessons I learned from my dad have served me well and I hope I have lived up to his expectations. The relationship banking we have promoted and practiced for over 116 years has given our clients the confidence and support they needed during difficult times. Consistency of management and purpose has provided the stability for the communities we serve and the clients who have trusted Capital City with their money. At Capital City, the mantra we practice with every client interaction is “More than your bank. Your banker.”
5. As Tallahassee’s oldest bank which opened its doors in 1895, the core culture of Capital City Bank has been founded and nurtured by its deep ties to the community. Today, personal relationships and a commitment to giving back continue to be a mainstay and all employees provide at least 10 hours of community service per year. In 1983, the Company established the Capital City Bank Group Foundation, a 501 C (3) not-for-profit, tax exempt foundation. Can you share some of the special projects and community needs this organization has help to fund over the years?
Community service is a hallmark of Capital City. We believe that in order to have a strong bank, we need strong communities, and it is vital that our bankers give back. Capital City bankers are known to take leadership roles with deserving organizations across our footprint, and in 2010 Capital City associates provided almost 12,000 hours of community service. This company-wide culture of community service goes hand in glove with the Capital City Bank Group Foundation which distributes 1.75% of each year’s after-tax profit to deserving entities. This is important because the vitality and energy in a community is often judged by the success of its non-profits.
6. As a Tallahassee native, Florida State University graduate and recent inductee into the Florida State University Business Hall of Fame, you must be thrilled when considering what the future holds as the Seminoles head into the 2011 football season. Are you placing any wages on a national title coming off a strong 2010 season with a top ten pre-season ranking?
FSU is critical to the success of Tallahassee and athletics is a big part of our economy. I like the years FSU has seven or eight home games for lots of reasons, one of which is the economic engine a home football game fuels. Winning ten games in 2010 and beating the University of Miami, the University of Florida and Steve Spurrier makes for a good year. FSU has two national championship signs up in Doak Campbell Stadium (1993 & 1999). I would like to put up a third soon.
About William Smith, Jr.
A native of Tallahassee, Mr. Smith is Chairman, President and Chief Executive Officer of Capital City Bank Group, Inc., and Chairman of the Board of Capital City Bank where he has worked since 1978 in numerous capacities. He attended Darlington School in Rome, Georgia, and graduated in 1972 with the Faculty Medal for General Excellence. He received his Bachelor of Science degree from The Florida State University in 1976. He was inducted to the FSU College of Business Hall of Fame in 2009. Mr. Smith is currently a member of the board of directors of Capital City Bank Group; Capital City Bank; The Florida State University Athletic Board; The Florida Council of 100 and Southern Company.