First Resource Bank: A look inside IR at a community bank

Sep 04, 2019
CFO Lauren Ranalli discusses the challenge of running IR with a small team

When asked to name her responsibilities, Lauren Ranalli, CFO of First Resource Bank, rattles off a range of departments. ‘You tend to have 12 titles when you work for a bank this size,’ she explains.

Across the US there are several thousand small financial firms, termed community banks, serving the local areas in which they operate. While they do not have the clout or assets of bigger industry peers – most community banks manage less than $1 bn – they make up for it through their strong ties to local individuals and businesses. 

First Resource has two branches in the Delaware Valley, an area that covers eastern Pennsylvania as well as parts of New Jersey, Delaware and Maryland. With fewer than 50 employees at the bank, senior management has to make careful decisions about how it spends its time, including with the IR program. Below, Ranalli explains how First Resource approaches investor relations. 

Tell us a bit about First Resource Bank and your role

First Resource Bank opened in 2005 and we had to raise at least $10 mn in capital to open back then. It was primarily friends, family and future customers who funded the initial capital-raise that got us open. Those people became our customers, our ambassadors in the community, which was really valuable for us when we started out. I am the CFO as well as a director and chief risk officer, and am also in charge of HR and involved in IT and marketing. 

Who handles IR at your firm? Do you use any outside support?

It’s just me. We don’t use an outside firm. It takes a village: we support each other as much as we can but primarily the IR burden falls on me; I handle all things related to the stock. Glenn Marshall [the CEO] and I tag-team when we have investor meetings – the two of us generally do 100 percent of them together. 

When targeting new investors, do you prioritize institutional or retail investors?

We are looking for either type of investor. Institutional tends to be a little bit more efficient, because of the bigger cheques, but we have quite a mix. Institutional is less than 15 percent of total shares; we’re primarily a retail hold right now. But our last capital-raise was 100 percent institutional.

Do you undertake non-deal roadshows?

We haven’t seen a need for them. As we grow and our capital needs increase, I’m sure that will become more demanding of our time, but right now it allows us to focus on running the business rather than constantly doing roadshows and investor meetings. We have a really good story so we do like to get in front of people, because nobody can tell our story better than us, with the passion we have, being founders of the company. But there is a time and place for it. 

How do you partner with the sell side?

We tend to partner with bank-specific investment banking firms that don’t waste our time and put us in front of the right people. I think those partnerships you foster when you need capital and when you don’t need capital are incredibly important. We were just in New York meeting with some hedge funds and we didn’t need any capital at the time. It was more about the opportunity to share the story and foster those relationships.

How do you make use of technology for IR?

We find virtual investor conferences are a great way to reach people – not only people who attend the conference, but also people we come into contact with later, because we can archive the virtual presentations on our website. We have also conducted a capital-raise from our conference room. We worked with a very reputable New York firm and it set up every investor meeting through teleconferencing. Being able to complete a capital-raise without leaving the boardroom was very efficient.

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