Main Bank – The go-to solution for local lending

January 7, 2022

Main Bank

The go-to solution for local lending

Business View Magazine interviews Alan Shettlesworth, President & CEO of Main Bank, for our focus on Community Banking in the U.S.

Main Bank has been proudly serving the community of Albuquerque, New Mexico since 2005. With an emphasis on exceptional customer service, the bank believes in local investment, helping businesses grow and thrive, and putting local deposits to work in the community. Celebrating its 16^th birthday in November 2021, Main Bank was founded by seven local people who decided to join together in 2004 and start a bank. Originally, the idea was to open a de novo bank, starting with no loans and no deposits, with plans to acquire those along the way. As the group began raising capital, they were presented with an opportunity to acquire Inter America, a small commercial bank.

Alan Shettlesworth, President & CEO

Alan Shettlesworth, President & CEO of Main Bank recalls, “That opportunity came up, and it advanced our business plan by a few years, just because we had some momentum, some assets, and some loans and deposits to get us going. We acquired that bank in November 2005, and when it comes to small banking, I don’t think it gets any smaller than that. When we acquired Inter America Bank, we were $30 million in total assets and our loan portfolio was $17 million. That’s not a small bank, that’s a micro bank.”

Immediately following the acquisition, the bank started working on growth – not an easy task in a community which at the time had five other small locally owned banks and three larger locally owned banks that controlled the market. “Here we are, this tiny bank with more capital than the bank had before, but without a huge legal lending limit. We couldn’t really go after big deals,” says Shettlesworth, “and so we were trying to get these loans, trying to increase the earnings for the bank and get some momentum going.” He describes losing out on loans to larger competitors during a peak time for the market, knowing they would not compete with longer amortizations and lower rates offered by the competitors.

With slow and patient growth, Main Bank found itself in a unique position in 2009, when Albuquerque was hit with the recession. Shettlesworth recounts, “Here is where the lucky part comes, we had started at the end of 2005 and we didn’t have time to put many bad loans on our books; we did have some problems, but very small in comparison. When 2009 comes around, we are still lending and all those competitors that we were losing those mediocre loans to, they all went under regulatory orders. Two of those large banks failed and that totally disrupted the market.”

As they continued their careful and strategic growth, Main Bank once again found itself in a position to acquire a struggling bank, taking over Bank 1st in 2012. Shettlesworth explains, “We, a small bank, were able to get in there and understand what the problems were and address those immediately. It took us about 12 months to clean up that portfolio, and we kept going from there.”

Today, there are only three banks headquartered in Albuquerque, with Main Bank the primary local lender. “It is a completely different landscape,” Shettlesworth adds. “The final cherry on top is that we might not have even been able to start the bank, today. It was literally this year, just with our strong performance in retained earnings, where we crested above $20 million. When we started with about $6 million in capital, that was okay back then, but you don’t even have that conversation with federal regulators under $20 million today. It’s just fascinating. In that regard, it was the most brilliant decision ever, but it was tough for the first five years.”

With only one location and one ATM, Main Bank remains committed to the local market, with no current plans to expand beyond the community. Main Bank has some consumer products on the deposit side and some consumer loan products, but their energy is focused on commercial lending in the small- to medium-sized business community in Albuquerque and in New Mexico. This community approach to banking added to the stress during the early days of COVID. As Shettlesworth recalls, “We knew a lot of our customers were going to be struggling in a big way. There was just a lot of anxiety because our customers are our friends, our family, and their pain is our pain.” The PPP program created an opportunity for Main Bank to support customers and provided a much needed distraction.

Main Bank

Jumping in a few weeks before the program went live, the bank was able to learn as much as possible about the requirements, sending information to customers who would need this assistance, and onboarding them ahead of time. “Once we started booking these loans, that was all we did for months,” says Shettlesworth. “And what an amazing thing, knowing that we were helping our customers. Just seeing the relief melting away from them was an unbelievable experience. Definitely the highlight of last year, it was amazing. So we went from this extremely nervous situation, to one where we didn’t have time to focus on being nervous. All we had time for was to help as many customers as we could. Thank goodness for that.”

Currently employing 17 people, Main Bank has a diverse mix of new and long-term staff. They span a variety of ages, ranging from employees in their 20s to those in their 60s and 70s. “We now have what I think is a pretty evenly mixed group from both age and diversity here,” notes Shettlesworth. “That was not the case five or six years ago. We had a huge, outsized influence with people who were in their 60s and 70s. I have no problem with folks of an older age, because they know what they’re doing. I just know at some point those folks may want to retire and we would have to deal with that bottleneck.”

He adds that attracting younger employees can be challenging, with fewer people going into the banking industry. In keeping with the community banking model, many of Main Bank’s employees are actively involved in the community, sitting on local boards, and working with non-profit organizations.

Keeping things simple is a priority for the bank, as Shettlesworth discloses, “We don’t do all things for all people, we tend to focus on commercial and commercial real estate projects. That’s our comfort level. My focus is exclusively on making it easier for my customers to get their banking services done without having to come to the bank if they don’t want to.”

Main Bank is currently in negotiations for a new core processor, with the conversion planned for 2023. Other than that, there are no major technology upgrades planned, other than possible enhancements to online banking and making importing information quicker for employees. “I’m really happy with what we have right now, we just want to add a few more bells and whistles… I don’t think we’re really missing anything,” Shettlesworth reports, adding that although he is intrigued with some of the fintech solutions, there isn’t anything available which would offer a valuable upgrade for the bank.

He suggests, “Since our model is to do loans exclusively in New Mexico, because we take our deposits from New Mexico and that’s our mission and our desire and our intent to benefit the community and benefit the state of New Mexico, we are going to put those deposits to work here. We don’t need to get too complicated. We tend to stick to the same four or five loan types, and rinse and repeat every day. I have not identified a fintech solution that’s going to speed up our offerings.”

During its first 16 years, Main Bank has harnessed the fortune of good luck and smart planning to bring it to where it is today. Looking at what might come next, Shettlesworth, who has been with the bank from the beginning shares, “As bankers, you feel pressure to offer everything to everybody. If you get to a $2-3 billion organization, maybe you do need to materially expand your product offering, but for right now, we have so much growth opportunity in front of us that I don’t really see the need to do anything more than what we are currently doing, for a long time.”