President Michael Brady has left Systematic Savings Bank after three decades – the last several years marked by increasing financial losses.
Derek Fraley quickly took the reins July 19, after being drafted from BancorpSouth Inc. (NYSE: BXS) where he served as vice president and commercial lender since mid-2014.
Neither Brady nor Systematic Board Director Jeff Seifried could be reached for comment by deadline, but Fraley said this morning he’s strategizing ways to increase the bank’s deposits and loans.
“They haven’t been profitable for a long, long time,” said Fraley, in his second day on the job.
Facing net operating losses of $667,000 in 2016, $445,000 in 2015 and $265,000 in 2014, Fraley said the board has charged him with turning around the financials.
“We’re a 94-year-old institution,” he said. “We’re going to celebrate 100 years here soon and I want to celebrate the 100 years with a great earnings year – I want to celebrate our 95th year with a great earnings year.”
His plan includes a continuation of changes Brady put in place to move the institution from a savings-and-loan model to a conventional bank model, with more commercial loans.
Fraley also wants to increase the number of short-term loans and decrease the number of long-term loans – to protect the bank from rising interest rates.
“In other words, take something that’s very long and sell it into the market, and go into something a little shorter. So as the yield curve rises, we have the opportunity to keep reinvesting into a higher yield curve,” he said.
He’s identified the bank’s need for new deposit offerings to attract more liquid capital, possibly borrowing wholesale money from other banks in order to increase loan capacity.
Systematic has operated downtown at 318 South Avenue since 1923 and officials added a loan center December 2016 at 1322 E. Kingsley St.
Systematic has about $30 million in assets. In BancorpSouth, Fraley comes from a multistate regional bank with $14.8 billion in assets. He’s also worked for Guaranty Bank and UMB Financial Corp. during his 19-year banking career.
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