Anthony G. Nuzzo
Title: Chairman, President and CEO, First Commons Bank
Age: 63
Experience: 40 years
Starting a bank in 2009, during the depths of the recession, is a crazy idea. If you say that to Tony Nuzzo, well, he’ll probably agree with you. But Nuzzo had a vision, and he would not be deterred by a bad economy, encroaching regulatory burden or negative PR. Now, five years after getting First Commons Bank off the ground, Nuzzo and his team have grown the Bay State’s newest bank to well over $200 million in assets. Nuzzo sat down with Banker & Tradesman recently to chat about those heady, rough-and-tumble early days.
Q: You launched First Commons Bank in 2009, and that wasn’t exactly the best time to start a bank. Can you talk about that experience?
A: That’s probably a gross understatement. Starting in December of 2007, I went from friend to friend. I had to collect $3 million in order to file an application with regulators, and I did it in 30 increments of $100,000 … we had 40 founders, 26 of us put in $100k, I took out a couple of LLCs with multiple people. We filed our application in August [2008], and we had to re-file in October. Sure enough, by the end of October, November, the world had collapsed, so if we didn’t get the bank up, all of us would have lost our money.
Between that October and February of 2009 is when the collapse occurred, and I got the OK at the beginning of 2009 to go out and start raising money in the next round. At the beginning of February, Bernie Madoff was on the cover of every magazine, you had the collapse of several major financial institutions, and there was a lot of distrust of everyone in financial services. Bankers were at the worst in terms of likeability. If we had just been back to August of 2008, I probably could have raised the remaining $10 million in a heartbeat.
Q: What was your strategy for growing this new bank in the midst of a recession?
A: Well, I finished [raising capital] in June. It took me four months, and I didn’t raise just $10 million like I needed, I raised $15 [million] and change. I oversubscribed to the maximum, so we opened the bank with over $18 million instead of $13 million, and that allowed us to grow larger than we would have otherwise, because growth is a function of capital.
The other thing that helped our growth enormously was, up to this point in time, many of the banks in this country, and certainly all of the ones I researched, almost all of them, would find three or five people to put in $3 or 5 million each, and they could start a bank. That was not something I was able to do, nor was it something I wanted to do, because then you’d have people pushing their weight around, and it may not always be in the best interest of the bank.
That was really one of the key ways the bank became successful early. We had a lot of growth, and we didn’t really focus on profitability in our early years … We first reached profitability in December of 2011, way ahead of what we thought, and we’ve made a lot of money since.
Q: You said you’re after the customers who are fed up with big banks; besides choosing a location near a lot of said big banks, how else are you attracting that demographic?
A: Carefully selected, targeted marketing on a local basis, whether it be in local newspapers or local mail, or [on the] Internet, there had to be outreach. That combined with actual physical sales outreach and incredible word of mouth … It’s almost guerilla marketing. It’s trying to find a low-cost unusual approach to fight a goliath.
One of the things we do for our anniversary every year is we put covers over the parking meters of large sections of Newton and Wellesley. On Sept. 14, or closest to it, either Friday or Monday, we have covers on all the parking meters in Newton and Wellesley that say, “Free parking today, courtesy of First Commons Bank.” We get a lot of attention for that, and we get a lot of people walking in to thank us for what we did that day. And when they walk in, they get to see our bank, and they get to meet our people.
That’s a good example, and that’s how we do it. It’s a relatively low cost item with major impact … you need outreach, but you’ve got to be smart, especially if you’re a new bank with not a lot of money. We got a lot of attention for that, and we got a lot of press.
Tony Nuzzo’s Five Favorite Broadway Musicals:
- Les Miserables
- Jersey Boys
- Cats
- Wicked
- A Chorus Line
