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A ‘Big Picture’ Banker

Scott Heitkamp, ICBA’s incoming chair, has weathered banking busts and booms.

By Toni Lapp, Senior Editor

There was a time when Scott Heitkamp thought he might follow in his father’s footsteps to become an engineer. A pro with numbers, he worked summers at his father Harlan Heitkamp’s civil engineering firm in Corpus Christi, Texas, but his heart just wasn’t in it.

He wanted a job where he could work closely with people, so upon graduation with a degree in finance from Texas Tech University, he became a credit analyst at San Antonio-based Frost Bank in the early 1980s.

Then the state’s oil industry came crashing down, bringing with it the fortunes of many banks in the state that had failed to diversify. As with other boom-bust cycles, the numerous bank failures provided opportunities in the state, and Heitkamp moved on to a job in the acquisitions department of a large bank holding company. He would visit struggling banks that the firm was considering purchasing. The experience helped make him a more well-rounded banker, he said.

“I would look at loans, deposits, basically do a mini-exam to report back to the purchasing committee in its quest for due diligence,” he said. “I saw all aspects of how a bank works.  How the lending side, deposits side and operations all taken together created the overall picture of a bank.”

And then, in an ironic twist, the elder Heitkamp, who had served as a director on a bank board, decided to buy International Bank of Corpus Christi. Did the son advise the father on the acquisition?

Heitkamp laughs. “He made his own decision,” he said, adding in a Texas drawl: “He’ll tell you it’s the craziest thing he’s ever done.”

Nevertheless, as Heitkamp describes it, his father called him up and asked him if he would work alongside him to help run the institution, and the two “merged our careers together.”

Family-owned and operated, ValueBank now has nine branches and 130 employees, with $225 million in assets.

Getting to this point has been a memorable journey that Heitkamp reflects on often, especially now that he’s moving into the role of chairman of the Independent Community Bankers of America.

Mergers, Acquisitions, Recessions and More

In 1987, the Texas Legislature passed an intrastate banking law allowing branch banking in the state, and the International Bank of Corpus Christi, under the Heitkamps’ leadership, moved to consolidate five sister banks with separate charters into one charter.

Scott Heitkamp can tell you without hesitation the date the Texas Department of Banking approved the merger: May 8, 1991. It was the day his first child was born, and he fondly refers to daughter Hailey as “the merger baby.” A son, Andrew, arrived in 1994; he is currently enrolled in Texas Tech, majoring in finance and leaning toward a banking career.

Over the years, the Heitkamps’ bank acquired more branches, and rebranded itself as ValueBank Texas in 1998. Scott Heitkamp became president in 2000, and then added CEO to his duties two years later when his father stepped down from the role. He also followed in his father’s footsteps and became actively involved in the leadership of the Independent Bankers Association of Texas. The two were the only father-son duo to both serve chairmanships for the organization.

IBAT President and CEO Chris Williston says Scott Heitkamp maintained an air of calm when the state was experiencing another banking crisis in the aftermath of the great recession. In fact, says Williston, Heitkamp was an IBAT vice chairman in 2010 and took on the duties of chairman a year early, with a mere 30 days’ notice, when the current chairman-elect had to withdraw to deal with his own institution’s struggles.

It was a crucial time for banks in the state, with 160 institutions lost in a flurry of consolidations and failures, says Williston. Heitkamp recalls it was a time of uncertainty, with much apprehension over the Dodd-Frank Wall Street Act.

His first order of business was to reassure bankers that the community banking model would remain viable and that the future of community banks was secure.

There was one positive that came from those trying times, as Heitkamp sees it. “People started understanding the difference between a community bank and a big bank,” he says. “What was a challenge [regulatory burden] gave us an opportunity to educate the public.”

Leading the Way for ICBA

Williston, whose friendship with Heitkamp goes back 25 years, commends his friend’s banking acumen. “Scott is one of those rare CEOs who ‘gets it’ from an operational standpoint,” he says. “So many come up from lending side. But Scott understands operational complexities and the inner workings of a bank.”

Not only that, but he is competitive, says Williston, recalling how Heitkamp studied the Houston market carefully before expanding ValueBank into nearby Richmond, Texas.

Heitkamp has also been an early adopter of technology. ValueBank has been on the leading edge when it comes to offering digital and recently rolled out an app for mobile users.

ValueBank has also been active in philanthropy. Employees are encouraged to get involved with at least one nonprofit. Every year, each ValueBank branch picks a charity to fund-raise for, which becomes a bit of a friendly competition between branches. And Heitkamp further serves the community through his work on several boards, including that of the local children’s hospital foundation and the Texas State Aquarium.

Needless to say, his broad range of experience will be helpful when he takes on the chairmanship of the ICBA. He previously worked on the organization’s membership and marketing committees, as well as its political action committee. He has three goals in mind for the upcoming year:

  • Banking regulations. Heitkamp is optimistic that the Financial CHOICE Act introduced by U.S. Rep. Jeb Hensarling, R.-Texas, could scrap many of Dodd-Frank’s more restrictive measures and level the playing field for community banks. Heitkamp would like to see bifurcation of regulations and compliance measures tailored to an institution’s size.
  • Credit unions: Heitkamp laments that credit unions in Texas can offer 15-year loans to mom-and-pop shops that a bank regulator would flag as inappropriate. And on the deposit side, due to credit unions’ tax-free status, they are able to offer higher rates than a community bank. While he doesn’t expect efforts to lobby against credit unions’ tax breaks to be successful, he would like community banks to receive similar tax breaks. “I want to play offense,” he says.
  • Grooming the next generation of leaders is important to Heitkamp, who notes that he will be relying on younger executives at ValueBank to take more responsibilities while he is serving his one-year term with ICBA. He hopes that relieving some regulatory and compliance burdens will make community banking a more appealing career.

Given the outcome of the 2016 election, Heitkamp sees many opportunities for the year ahead.  “I want to be a difference maker – for the ICBA, for my bank and for the industry. It’s going to be an exciting year.”

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