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Organizers say public weary of impersonal service from large banks

Madison County Bank plans early-2001 opening

RIDGELAND — After years of watching bank branches pop up in Madison County in pursuit of higher-income residents and businesses as customers, several

Madison countians, disenchanted with the perceived impersonalization of much larger banks, decided to organize their own.

Early next year, the Madison County Bank will open a temporary location with 14 employees at the southwest corner of U.S. 51 and Washington Street in Ridgeland.

Completion of the bank’s permanent 10,000-square-foot main office is slated within the first year of operation.

The new bank is designed to “provide an inviting atmosphere for those who choose to do business…the hometown way,” said J. Keith Newcomb, co-founder and

senior vice president of Madison County Bank, formerly affiliated with Fleet Bank, Boston, and a finance graduate from the University of Texas at Austin.

“The idea got started when my son, Keith, learned through talking to people in the business community that a lot of people weren’t too happy with the bigger banks

because of the consolidation, selling out, ownership from out of state and other factors that spur people to start small banks,” said James S. “Jim” Newcomb,

president. “Because I had started a couple of banks, he talked to me about it, asked me to help him start this one, and I agreed.”

Jim Newcomb, a veteran banker most recently affiliated with the FDIC in Washington, D.C., and a certified public accountant who received an undergraduate degree

from St. Mary’s University and followed with advanced banking studies at Harvard University and at the Southwestern Graduate School of Banking at Southern

Methodist University, organized a group of professionals, largely comprised of physicians, that serve as the board of directors.

“Keith’s wife, Carol, is an anesthesiologist at University Medical Center, and the medical tie-in was almost coincidental,” said Jim Newcomb. “The formation of the

bank evolved after talking to two or three people who thought it was a good idea and wanted to participate, and then they talked to two or three people who wanted

to come on board. We ended up with eight in our final organizing group.”

In addition to the three Newcombs — Jim, Keith and Carol — other board members include Claude D. Brunson, anesthesiologist, clinical director of the UMC

anesthesiology department, and chief of staff at UMC Hospital; Kenneth G. Perry, Jr., a UMC alumnus who practices maternal fetal medicine with the Women’s

Specialty Center; Mike Richardson, executive vice president and chief operating officer of AmFed in Ridgeland; Mark J. Shapley, a private investor and restaurant

owner; and Bert A. Welch III, a Jackson native and anesthesiologist.

In the 1990s, the increasing number of high-income professionals moving to Madison County prompted banks to establish 11 FDIC-insured branches in Madison

County, according to the state department of banking and consumer finance.

As of June 30, 1999, the market share report, reflecting deposits of all FDIC-insured institutions operating in Madison County, reported $693.1 million in total

deposits at 33 branches. Trustmark garnered the highest market share, nearly 32%, with $220.7 million in total deposits at 11 offices in Madison County.

BankPlus, with seven branches, and an 18.7% market share, reported $129.7 million in total deposits, while Merchants and Farmers Bank, with four branches,

reported $127.7 million in total deposits, for an 18.4% market share. Tennessee-based banks, First American National Bank and Union Planters Bank, reported 11%

and 6% market shares, respectively. BancorpSouth Bank, Valley Bank, and SouthBank accounted for the balance.

During the same time period in 1995, 25 branch offices in Madison County reported $514.5 million in total deposits. Figures for the period ending June 30, 2000

were unavailable at press time.

From 1990 to 1998, Canton, Madison and Ridgeland were listed among the state’s 10 fastest-growing municipalities. The population of Ridgeland, the county’s

largest city, and Madison increased from 19,185 to 29,163 in the eight-year period, with Canton experiencing a growth spurt of 1,731 residents from 1995 to 1998.

“We’ll be like what the old neighborhood, small town bank used to be,” Jim Newcomb said. “We’ll focus primarily on attracting professionals, including doctors and

attorneys, plus small businesses, like retail and that sort of thing, and other individuals.”

Spurred by a strong economy, new community banks have popped up as mergers have removed a lot of hometown institutions, said McKinley “Mac” Deaver,

executive director of the Mississippi Bankers Association.

“An interesting phenomenon that’s happening here and around the country is that a lot of new charters are pending,” he said. “We went for years in Mississippi with

just 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. In some cases, the desire of

local investors to have a bank based in their own community has been the reason for a new crop of charters. Local investors pool resources and go through necessary

regulatory procedures to get a bank charter.”

Page Ogden, president of the Mississippi Bankers Association, said the trend in new charters reflected in Mississippi and nationwide doesn’t necessarily reflect

significant movement in bank capital formation that focuses on particular professional groups.

“Recruiting capital using ‘affinity’ marketing certainly has its appeal,” Ogden said. “The initial investors supply not only capital but also deposits and loans. This

ready-made capital and customer base helps the profitability projections. The challenge for the new startups is to grow beyond their investor base, and that need for

growth along many lines within a geographical area may interfere with the starting vision of the original investor group.”

Even though Madison County Bank will not initially offer Internet banking, Jim Newcomb said it’s in the works.

“It would probably makes sense for the affinity or niche players to makes full use of Internet banking,” Ogden said. “Internet-only banks have not caught on as hoped,

but the affinity angle may give them an unexpected boost.”

Other products, such as insurance, will be offered at Madison County Bank at a later time, Jim Newcomb said.

“We definitely plan to offer a full range of financial services in addition to banking,” he said.

The elder Newcomb would not disclose capital already raised for Madison County Bank, but said the initial stock offering would be $5 million.

“We would like to emphasize very much that we’ll focus on personalized service — a small business approach to banking,” he said. “We will be locally owned and

managed, and we will be very much involved in the local communities of Ridgeland and Madison.”

Dianne Dyar, executive director of the Madison County Chamber of Commerce, said competition is always good for consumers.

“We certainly welcome new businesses to Madison County,” Dyar said. “I can’t think of a better place to locate a corporate headquarters than in Madison County.

As a chamber, we will support and work with them to develop their business as we have other chamber businesses.”

Long-range plans do not call for venturing outside the county limits, but organizers wouldn’t rule ou
t
the possibility, Jim Newcomb said.

“If we go beyond Madison County, we’d likely do that by forming another local bank wherever we go as opposed to getting into the same mold as the bigger ba

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