Banking on KC – David Cota and Joe Close: A New Chapter in Community Banking

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Kelly Scanlon: Welcome to Banking on KC. I'm your host, Kelly Scanlon. Thank you for joining us. With us on this episode is David Cota, the Executive Vice President of the Banking division at FNBO, and Joe Close, regional leader for Kansas, Missouri, and Texas. Welcome to both of you. 

David Cota: Thank you, Kelly.

Joe Close: Thanks Kelly. 

Kelly Scanlon: And so glad to have you here on a really very exciting day in the history of both banks. The merger closing has taken place, and we're here celebrating the new bank. So, let's talk first about that merger. Let's take a step back, several months, years maybe, and talk about why the merger was even discussed to begin with. What was it that made sense about joining the two family-owned banks?

David Cota: Kelly, thanks for hosting this conversation today. Joe, it's great to see you as always. It is an exciting day. It's a day we've been working toward, for quite honestly, a number of years, and you ask a good question: why the merger? Why does this make sense? And you hit on it in the question itself, at least one of the major points of why this makes sense; simply that FNBO and Country Club Bank are both multi-generational, family-owned banks, with deep roots in the community and the relationship between the two companies actually goes back many years. The Lauritzen family and the Thompson family have known each other well for many years. There are a number of points of connection, and so it was natural when the Thompson family started considering strategic options for Country Club Bank and looking out into the future in the next 20, 40, 60 years that one of the conversations that they would have would be with us, with FNBO and with Lauritzen Family, and we couldn't be more excited. The merger between the two companies is a natural fit. The cultures are an extremely strong and natural fit, and we've been in Kansas City for 32 years. FNBO has 10 branches here, and it's been a market that we have always aspired to have the scale and the presence and the reputation that Country Club has. And so, we believe we can bring quite a bit forward to complement. What is an excellent business and an excellent group of people in Country Club and vice versa. We think our team in Kansas City can provide insight and a bit of a portal into FNBO and help with the acclimation and the integration into FNBO for the Country Club team.

So for many points it really made sense almost across the board in every way. 

Kelly Scanlon: And I know Joe, you have been involved in this, so talk to us about your perspective on it. 

Joe Close: From my standpoint, I'm just gonna share a little vignette with you. I think it was two or three business days after the announcement was made and, and Clark Lauritzen and David came down. Paul Thompson and I sat on a panel at a town hall, if you will. Well, during the course of that conversation, Paul held up what looked like a high school yearbook, and it really was the chronicle of the nearly 150-year history at the time of FNBO and inscribed inside that yearbook, like one would sign on graduation day was a little blurb from Bruce Lauritzen, Clark's father, and Byron Thompson, Paul's father, and it just showed their affection for one another.

That was dated 1998. So that just illustrates the duration, the length of the relationship. Now roll the clock forward. As we grew Country Club Bank, we grew in sophistication. We hired a lot of A-players that came from other banks to join our team. We started doing larger and larger transactions with larger companies.

And frankly, a lot of the companies that we had banked, multi-generational companies, had grown to the point where they had almost outgrown us. So, we had to find an upstream correspondent bank with whom we could participate that had a similar credit culture and FNBO fit that bill. In addition to that, they had a lot of services that we really needed, that we were deficient in.

For example, international services. They're a huge Ag lending bank. With Ag comes sales to international countries, and so they have a great international platform. We grew closer. It was obvious that we had similar credit cultures, and it doesn't surprise me in retrospect that we're now one. 

Kelly Scanlon: We mentioned the multi-generational family-owned commonalities between the two banks – it goes all the way back to 1857. I mean, pre-Civil War. Can you imagine what this part of the country probably looked like at that time? So, David, talk to us about the origins of FNBO and how it's grown today. What's been your strategy for growing it into a bank that doesn't have a physical presence in all 50 states, but it has customers in all 50 states?

David Cota: The bank was founded in 1857, as you said, by two brothers Herman and Augustus Kountze. And in fact, with that, we will celebrate our 168th birthday this December, which is incredible. When our chairman Clark Lauritzen, when he talks about the age of the company or that lineage, he likes to say our 50th Anniversary was 117 years ago.

So it puts it into perspective pretty quick. And you talk about what the state was like… so, founded in Omaha, Nebraska, by the two brothers. Our first business was trading in gold dust and buffalo hides. We actually still have in our headquarters building the scale that Herman Kountze used to weigh gold dust, and we were the 209th bank to receive our national banking charter in 1863, which was actually when Abraham Lincoln was president.

And Nebraska wasn't even a state. Nebraska became a state four years later. So, you know, it definitely was the frontier, and banking was certainly much different than it is today. But over the years, we've grown to the point that, you know, we're now the 65th largest bank in the us. And it really is a combination of very committed and focused local businesses with a national business that we run, as you said, across the entirety of the country, and that's our credit card business. We are a top 15 issuer of credit cards nationally. Our strategy in the credit card part of our business is to issue credit cards for large, recognizable national brands. So, we issue credit cards for companies like MGM, Amtrak, Universal Studios, Shields, BP, Verizon, Mary Kay.

Our strategy is if we align ourselves with strong brands that have affinity and loyalty within their services, credit card and banking products will run really well alongside, so that's been one aspect of our growth, but our growth has also come through our banking franchise, which now spans nine states throughout the Midwest.

We have 120 branches across those nine states, 5,000 employees, and we have a real nice mix of business across our banking franchise. A couple of maybe fun facts – we're the fourth-largest lender to the ag industry. We have an equipment finance company, DFS, that is one of the largest financiers and insurers of center pivots in the U.S.

We're a top 10 underwriter of bank-qualified municipal bonds through our investment and capital markets subsidiary, Northland Securities, which will be the part of our company that CCB Capital Markets will integrate into. And we've got a large commercial insurance agency, FNIC where we provide property casualty insurance, employee benefit insurance and crop insurance.

So a really nice diversified mix of businesses, both in Banking and in credit card with strong partners and a real focus on maintaining a local presence while at the same time leveraging our national scale. 

Kelly Scanlon: And Joe, it sounds like, from what I heard David saying, that many of the services and divisions that Country Club Bank has will dovetail nicely into the new arrangement.

Joe Close: Oh, it's a hand in glove fit. It's beautiful. And frankly, I continue to learn more and more about the FNBO offerings every single day, and I'm so impressed. Not only with the offerings and the reach, but the people. Let me bring that multi-generational concept down to the people. Clark is the sixth generation, and I know number seven, his nephew, is an intern this year.

At CCB, we had PJ and Colin and Matthew Brown. Third generation. Not only are all four of these people, tremendous technicians, gifted unicorn types. But their work ethic is unsurpassed. That's really, really rare, and they model that for the teams, and it's easy to follow leaders like that.

Family leaders. When you have that kind of work ethic. Coupled with the technical skills, and as Paul said, selling Country Club Bank to FNBO was akin to giving away his daughter in marriage. The Thompsons and Paul, in particular, were very thoughtful about what bank to partner with in that regard; the bank is a family member.

I assure you, it's one of those kind of things that family to family and the fact that we can continue to tell our clients and our prospects that we are family owned. 

Kelly Scanlon: Let's talk about the industry for just a minute. The Banking landscape is increasingly competitive. We all know that FinTech national players are continuing to expand their reach.

So, David, how will FNBO, with the added strengths of this merger, differentiate itself and deliver value to customers who just have so many choices these days? 

David Cota: One of the ways that we differentiate ourselves is through a way of interacting with our customers that we describe as uncommon understanding banking.

At the end of the day, and I know Joe and I share this belief, I know our company shares this belief, banking is a personal business. It's connected to the community, it's connected to businesses in the community, uncommon understanding. It's our commitment to our customers, our commercial customers, our wealth customers, our retail consumer customers.

That we know them at an uncommon level. We certainly are committed to bringing digital capabilities and very efficient and fluid and frictionless experiences. But if that's where we stop, we feel we won't be able to differentiate ourselves from the competition. We have to go that next step. And that next step involves our people.

Again, we believe banking is a people-to-people business. And so, we've set the standard that the threshold for our understanding of our customers isn't that we just know you, but that we know you to an uncommon level. And the next time I was in Kansas City with the team, I heard the Country Club team referencing that phrase, uncommon understanding, and yet very naturally, I mean, it was something that immediately connected and so it showed me that while the words may have been a little different, and Joe, you can tell me if that was a phrase that your team used prior to our conversations getting to this point, but it was very natural.

And so it was clear that the approach is similar. The standard is similar, and we can now use a similar way to describe it, and I think the marketplace will see that. 

Joe Close: So uncommon understanding. No, this, this was your phrase. We picked it up because, frankly, just like our value set, it really describes who we are in our philosophy of doing business.

And so it's a great way to encapsulate that concisely, I think about one of my trips up to Omaha and FNBO CFO, who, and we were still in the courtship phase, if you will, Mike Summers handed me a little green book and it was a book that outlined the value set of FNBO. I was so impressed by it, and it has some quotes in there.

The CCB value set was ACE IT – Achievement, Compassion, Enthusiasm, Integrity, and Teamwork. The FNBO values are integrity, respect, passion… they’re duplicates, and then we talk about teamwork. And here's a quote from Bruce in the little green book. “The spirit of teamwork has remained a key ingredient of the FNBO formula for success for over 150 years.”

That's exactly who we are. And furthermore, in that little green book, it continues to describe exactly how we do business. We listen, we care, and we trust. So there's such a wonderful match. I agree with David. 

Kelly Scanlon: FNBO, as you mentioned, has been in the Kansas City marketplace for a number of years now, and of course, CCB has a very, very deep customer base. So what kinds of changes or, you know, benefits will customers see? 

David Cota: I think the benefits in my mind are organized in probably two categories right off the top. The first is access, the second is breadth, and both from a geographic and from a product perspective. So access. Once we integrate the banking systems and get the Country Club Bank customers and the FNBO bank customers on the same banking platform, and that will take a little bit of time after the acquisition has closed now, but once we do that, the Country Club customers will have immediate access to 120 branches across nine states in the Midwest part of the country. They'll have access to a network of ATMs, 55,000 ATMs, all across the United States. And so that access is going to immediately extend and benefit them if they're traveling around those parts of the country.

If they have business operations in those parts of the country, that will be felt immediately. The other would be products, and I would tuck technology into that product set as well. Country Club has had excellent product offerings over the years, and we believe that it will be complemented by our payment capabilities, by our technology, our treasury management, and global commercial insurance.

Our wealth businesses fit together very, very nicely. And so when I think of benefits, Kelly, I think of both access and breadth being something that will be noticeable, very much so, by the customer base that we have now down in Kansas City. 

Kelly Scanlon: When you mentioned the integration and the conversion, how long do you think that will take?

David Cota: Yeah, we're in a really important moment in time right now where we are heads down. Our team is evaluating the integration timeframe that it will take for us to convert the Country Club customer base onto the FNBO Banking core platform. There's a lot of technology involved there. There are partners and vendors that are involved in that as well.

And we anticipate that that transition will take place next year, 2026. And the specific timeline as we land on it in the coming months will be communicated clearly to customers. Because right after close, you're in this interesting phase where we are one company now, but we have two Banking platforms.

We have the Country Club platform that's a legacy platform, and we have the FNBO platform. And so, for instance, if an FNBO customer walks into one of the new 20 branches that have come to us through this merger, and they asked to transact on their account, the former Country Club employees won't have access to that FNBO account today.

Same thing if a Country Club legacy customer walks into an FNBO branch. Our FNBO employees won't yet have that information. That's why we have to convert those systems together so we're all operating on the same platform. We're targeting plus or minus the middle of next year. We think the technology work and the timeline will play out for that to take place.

So, it's an important step, Kelly, and we can't get there fast enough because that's really the last piece of, you know, the technical and operational aspects of that are important in a merger process as it plays out. 

Kelly Scanlon: Joe, what advice would you give to Country Club Bank customers who are experiencing the transition or who might have questions?

I know that you'll be communicating with via email and in other ways to them, but just general advice. 

Joe Close: It's my directive to ensure three things. Certainty of execution, communication, and continuity of contacts as we bridge from the Country Club, Bank platforms to FNBO. And frankly, it's the communication piece.

We will communicate, communicate, communicate. And as David said on the timeline – it is dictated by a whole lot of different things. The platform availability of the teams of both respective platforms is one thing. I think we're adopting a measure twice and cut once type of philosophy on both the mapping and testing.

We want to get it right 

Kelly Scanlon: With your expanded footprint now across the Midwest, and even further, we've talked about how with the credit cards you reach all states. How will this combined institution balance regional consistency with local responsiveness? 

David Cota: Local responsiveness is so important to us, it really is.

Several years ago, I started leading our effort within FNBO to really drive operational consistency across our company. We had grown in the nineties and early two thousands through acquisition and our approach in those acquisitions. often was we would find a bank that was well-positioned with good people and a good leadership and management team.

We would make the acquisition, and we would effectively leave the core operating environment and core platform as it is. We weren't integrated as Joe and I just talked about, and so it brought us to a point in about 2014, 2015 where it was time for us to bring the company together operationally. But the reason why I mentioned that is because it was in that moment when we showed up in all those various communities across our company that we were in because of an acquisition years prior to those teams.

At times, some of the operational changes that were necessary felt like it might be a loss of local responsiveness. And we've all seen businesses that go through those moments where you're trying to balance. The growth and scale that your company is achieving, with a connection to the local markets. And so I started talking with leaders at that time very intentionally, about three pieces of their day-to-day and three decisions that are necessary to continue to be made in the local market that we would protect.

And those three decisions were first, we will and do continue to decision loans and credit locally. There's local credit authority that remains in the market. And so bankers have the ability to decision lending requests and credit requests from customers. Second is people. Joe is going to be leading our team in Kansas City, and so he and the leadership team in Kansas City are going to be continuing to make the decisions on the team and hiring and adding quality associates to the business going forward. And then third is the investment into the community. Those remain local-level decisions. And part of the reason why we set up that framework of those three elements is what tends to happen with banks is you can't get a decision locally any longer. The quality of the teams at the local level begins to fade, and they stopped showing up in the community.

And that just isn't who we are. And so it was very easy for us to say, and for me to say to the team, hold me accountable if we're making decisions that would compromise any of those three elements of our business. Please bring it forward because we have to retain that aspect of our business, because Kelly, that's how you maintain local responsiveness and a connection to the community.

And that will be the case here. Joe has led Country Club well and will continue to lead well and will have those decision authorities in much the same way as he's had over the years. That just puts us in the best position to continue to be successful. 

Kelly Scanlon: Joe Country Club Bank customers in particular will be so delighted to hear that because, as David mentioned so often, that's not the case after a merger occurs.

Joe Close: Kelly, as you well know, the heart and soul of any community is the small business.

Kelly Scanlon: Oh yes. 

Joe Close: And so as David said, it's so important to have local decision making and have real people that are invested in your business that oftentimes carry through multi-generationally when managing a client portfolio.

So I'm gonna share another vignette with you. I had a one hour presentation from the FNBO small business team a couple of weeks ago, I was absolutely blown away, and it really is two things. It's simple and it's efficient and it's effective. It delivers decisions quickly. It gets the dollars in the hands, particularly for relatively simple small business loan requests, equipment, things of that nature.

It gets dollars in the hands of the small business people who are always strapped for capital. It gets it in their hands quickly. We're gonna lay that out across our footprint in Kansas City, and our clients are gonna be thrilled about this. It's just an example of some of the sophistication and the practice over 157 years plus that FNBO has had to hone their business model, and we're gonna benefit from that with local decision-making and local delivery and that's what's critical. 

Kelly Scanlon: So let's talk a little bit further into the future here, post-merger. We're talking 2026 and beyond, so you know, hopefully the conversion of the systems has taken place. What are your top three priorities, each of you, for employees, for customers, and for the communities that you serve? Let's talk about the impact now for associates, for employees.

Joe Close: My mantra is that we become one ASAP. It's just not verbal. That is a mindset that we are one for our customers. We've described all the various ways throughout the conversation today. About how our services and our technology platforms will be enhanced by our conversion to the FNBO platforms.

I'm thrilled about that. We have the same highly qualified people. Our core group is still here to serve you, so that's really important that we have that continuity. And finally, at the community level. Frankly, FNBO just brings more capital to invest in our community. And I don't wanna steal David's thunder, but I do know that Kansas City is a critically important leg of the stool. I cannot describe to you how many trips the executive team and others have made down to Kansas City to sit across the table from us. And I know that they'll do the same thing with our clients when we need an expert in international services. Or ag, they're gonna come here to assist our clients and explain the business model.

And it's gonna be so many more arrows in our quiver. I'm just so excited about it for our community. 

David Cota: Joe, you set me up well there first to your comments around the, the importance of the Kansas City market to us. Kansas City's been an important market for us for many years, and we've aspired to be in a position that now together we are able to achieve.

And the even more exciting part of that is it's just the beginning from our perspective of the next step. And that is all around. As you had asked, Kelly, employees and customers and community, you asked for the top three priorities for those three, you know, 20, 26 or beyond. Let's say it's 20 27, 20 28.

What I would love is for employees, for customers, and for the community to describe us in this way. Um, boy, they still know me or they know me better. They've listened. They care and they've continued to invest in the community and make Kansas City even better. I mean, I would be so proud, uh, and will be so proud when we're able to look back in a couple of years and hear that sentiment echoed from our employees, from the customers across the Kansas City Metro, and that the community continues to look to us together as a key and critical partner to continue to grow.

And invest in the important elements of the community. That's my priority. The business aspects of this, I'm highly confident they will play themselves out. We will do well together. It's more important to me that we convey that authentic sense of, of care and commitment and that we've listened along the way.

That’s a good partner and that's exactly what we intend to be. 

Kelly Scanlon: David. Joe, thank you so much for being with us on this episode of Banking on KC. I know it's a momentous day. It's, it's a big milestone in the history of both banks and will come out bigger, better, stronger, and customers and community will be better for it as well.

So again, thank you for your time today in the midst of everything I'm sure you're handling. 

David Cota: Thank you, Kelly. Yeah, thank you Kelly. And I would also just extend my appreciation and on behalf of Joe and I. Our appreciation to the entire team. Our Country Club Bank Associates, our FNBO employees, both those in Kansas and, and those spread across our footprint.

It's been a lot of work. It's been fun, it's been challenging, and collectively it has been done really, really well. And so I see great things ahead with this team continuing to come together. Also, want to thank all of our customers and clients, again, both our FNBO customers in Kansas City. And our Country Club customers, I've had a great opportunity over the past six months to get to meet many of them.

I look forward to meeting many more. It's one of the great things I love about our business is being able to connect and get to know people at a personal level, understand their business and the way that they show up in the community. And it's been exceptional. So Kelly also thank you. You’ve given us a chance to talk about this exciting moment and this great point that we've arrived at.

It's been fantastic. And Joe, it's always great seeing you. Thanks for spending some time together as well this afternoon. The work's just beginning. The good times have just started, so I'm excited about it. 

Kelly Scanlon: Well, best of luck to all of you.

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