From rags to riches: an interview with Curtis S. Reis, chairman and president

RMA Journal, The, July-August, 2005 by Lisa Poirot

Alliance Bank's total losses in 1986: $1,806,000 Alliance Bank's total earnings in 1996: $338,000 Alliance Bank's total earnings in 2004: $3,938,000

Even with its need to regularly raise capital to remain well capitalized, Alliance Bank's diluted earnings per share rose from $0.09 in 1996 to $0.61 in 2004. How did this happen? Well-spoken and outspoken Curtis Reis, chairman and president, tells Alliance Bank's story, shares his concerns and the opportunities he sees ahead, and offers a few words of advice for community bankers. Lisa Poirot, RMA's Western Regional Executive, spoke with the veteran (of both the Army and banking) in April.

Poirot: You came in Southern California after working at Banker's Trust. Please tell us about your background and what prompted you to move to the West Coast and to Alliance. Bank.

Reis: I was recruited to Banker's Trust right off the Cornell University campus and, except for two years in the Army, I was with the bank for 20 years. It was a wonderful traditional bank and trust company, but after about 1.5 years, I became disillusioned with the bank, and they with me. The end of the story, of course, is that they later were taken over by Deutsche Bank.

Fortunately, at that time my wife, Pamela--also a Banker's Trust vice president--and I desired to move to California, where we had family. We were both recruited to higher-level positions by West Coast banks: I went to Crocker National Bank and Pamela went to a bank that soon became First Interstate.

Both of our banks were acquired later by Wells Fargo, which turned out to be blessings in disguise. Alliance approached me to be its president in 1986 (four other presidents had preceded me during the bank's first six years of operations--more about that later). When Wells acquired First Interstate 10 years later, Pamela cashed in her options to make a cash purchase of a lovely home--we like to joke that our purchase started the real estate recovery in California. As a matter of fact, our home purchase led to five other sales.

Poirot: Five bank presidents in six years sounds like you faced wire a challenge. Which previous banking experiences do you feel best prepared you to accept such a task?

Reis: I was very fortunate to have worked in a variety of positions at Banker's Trust. Most of my career there was spent in the national division; I traveled frequently to Michigan and Ohio and later ran the Southwestern division. Thereafter, I ran the training program, the credit department, and one of the bank's subsidiaries. Finally, I was chief of staff of the bank's holding company, working mainly with the branch system in upstate New York.

At Crocker, I gained a better feel for the retail side of banking, especially California style. Crocker was basically trying to become Citicorp West. They had a lot of good people, but they never quite gained the critical mass to make it happen. They also were trying to blend a number of bank cultures--U.S. National, Citizen's Bank in L.A., and Crocker Bank. I think if they had worked at it a bit longer, it all could have come together.

So I then had a feel for banking on both coasts, as well as in the Midwest and the Southwest. I also had gone to the Stonier School of Banking, which at the time was at Rutgers University. When you run a community bank, there are an awful lot of things they don't teach you. If you don't learn quickly, you can get in trouble, as Alliance had already discovered.

Poirot: OK, I see that you were well qualified. But what propelled you to go ahead with accepting a position at such an unsettled institution?

Reis: It was appealing to have the opportunity to run my own shop. In retrospect, I suppose all of the things that I had experienced at Banker's Trust and Grocker came together for me, and I believed l could turn this bank around and make it a success. As we've all heard, the Chinese word for crisis also means opportunity, and Alliance seemed to have the "crisis" part down pretty well.

Poirot: Well, Alliance celebrated its 25th anniversary two months ago, so we know their's a happy story here after all. Tell us about some of the challenges and milestones along the away.

Reis: The story is amazing in retrospect. I arrived at Alliance Bank on August 1, 1986; five months later, after writing down those loans that had not been previously written off, the net worth of the bank was a mere $277,000. Virtually nobody wanted to be a director--of the original 14, only two remain. The bank had shrunk from about $50 million to $20 million. Basically, it was in free fall.

Raising capital. It was not a pretty picture when, late in 1986, I spoke with the directors, our accountants, the FDIC, the State Banking Department, and others. The original capital was gone. I told the FDIC that my parents and I were prepared to put up at least $500,000 and that I thought I could raise $3 million. I said I would need six months and the FDIC's assurance that they would give me that time and would not grab the new money. Thank heavens they said yes, and thank heavens I didn't let them down.