How First National Passed Republic
and Other Stories of the Banking Game
(Page 2 of 7)
But even as Republic grew it was always in the shadow of First National, Nate Adams’ bank. First National was the bank of the carriage trade—more conservative, stodgier, more Victorian than Florence’s Republic Bank. Adams not only was a self-made banker, he was a self-made gentleman, and his bank resembled those one reads about in Dickens. First National grew through retained earnings, played it close to the vest, and never doubted its rightful place as the largest and most established bank in Dallas.
It took Florence twenty years to make Republic the largest bank in Texas. Two years later (in 1950) First National brought over Ben Wooten—the number two man at Republic—in an unsuccessful attempt to restore First National’s regnancy. Ben Wooten was of Dallas banking’s second generation, which was shaped in the same mold as the first. Wooten started his banking career in Alba and went from there to Farmersville, where as cashier in the local bank he met a young boy named James Aston. Aston, who succeeded Fred Florence at Republic in 1960, had started his career as a $50-a-month bricklayer during the Depression.
Aston is the transitional figure between the second and third generations. At First National, the third generation in the person of Robert Stewart has been in power for fifteen years. Aston, who will soon pass Republic’s torch to the waiting hands of a man of Stewart’s age, has grown and adapted to the various challenges which both circumstance and Stewart’s energies have thrown his way, and he is much more a figure of modern banking than anyone else of his generation. Still, the pendulum has swung completely, and Republic, which was once the hungry, scrambling, outrageous upstart is now the stuffy, slightly out-of-date champion. Robert Stewart’s rejuvenated First National is picking ’up the challenge with a vengeance, and with a style which would have surprised and perhaps even appalled old Nate Adams.
The Dewey and Bob Show
Dewey Presley and Robert Stewart, respectively president and chairman of the board of First International, cultivate a team image. When the middle-level management of First International discuss their firm they inevitably end up referring to “Dewey and Bob.” Dewey and Bob are the architects, the movers, the visionaries, the men who personify the whole endeavor. In many ways, “Dewey and Bob” expresses one concept: “That idea first came from Dewey and Bob”; “Dewey and Bob made the first contacts with the banks we wanted to buy”; “It was Dewey and Bob who decided we should be separate from First National Bank.” Dewey and Bob are treated as a unit, a single leadership phenomenon conveniently divisible into two parts for greater efficiency, but one all the same.
If Presley and Stewart argue between themselves, no one else seems to be aware of it. Since 1960 they have had coffee together at 7 a.m. each workday morning in the employee’s cafeteria on the eighth floor of the bank. Their offices adjoin. When discussing the bank, one man begins sentences that the other finishes. Through long association each knows what the other will say, and one imagines them occasionally agreeing, “OK, Dewey, today you say my lines and I’ll say yours.” Such teamwork requires considerable effort, particularly when the ultimate boss, Stewart, is the younger man.
In appearance the two men could hardly be more different. Stewart dresses in modified London banker chic: pin stripes with tailored jackets and trousers with just the slightest hint of flare. In his coat pocket he always sports a neatly folded handkerchief. Presley seems most comfortable in straight-cut suits of Baptist deacon blue. Outside the bank his main interests are his family and the Baptist Church. He has taught a Sunday school class at Park Cities Baptist Church since 1950, and is chairman of the board of Baylor University. Presley is a benign, gentle-looking man, with an animated face and eyes that wink when he is talking about the driest of subjects. There is no indication that the routine of banking has worn him down, none of the dry brittleness that seems to settle on accountants after years of going over books. Hollywood could have picked him to play the lawyer in To Kill a Mockingbird. Presley is of the first two generations of Dallas bankers—a boy from Gilmer who made it big, and who brought his small-town virtues to the big city. It would not be far-fetched to imagine him whittling on an East Texas front porch.
Stewart, on the other hand, is mainline Dallas. His grandfather was chairman of the board of First National, and young Bob’s career was foreordained. He majored in banking at (where else?) SMU, and went to work as a cashier at First National in 1951, cashing checks, depositing rolls of pennies, balancing the money-flow through his window. But Stewart is not of the same breed as the other Dallas bankers, including Presley. His career at the bottom was short-lived, since he was clearly born to lead the bank. It did not seem like an affront to the natural order of things that he was a vice-president in two years and senior vice-president in eight (when he was 34). The next year he became, at 35, the president of the bank, with Presley as his senior vice-president.
The two men had a year’s notice of their pending ascension to the bank’s cynosure. “Dewey and I worked nights the whole year getting ready,” Stewart recalls. “Back then we weren’t even in the game with Republic. Fred Florence had been president of the American Bankers Association and was known all over the United States. The main problem was that I was so young.”
Thirty-five is young to be at the helm of a billion-dollar business anywhere. It is particularly young to be head of a billion-dollar business in Dallas. Oh, the Ross Perots and the James Lings can do it, but they aren’t running one of the city’s linchpin institutions. Perot and Ling are wildcatters—men of action who come and go, comets of business genius trailing opaque tails of mergers, conglomerates, and other business pyrotechnics. Stewart at 35 was responsible for the bank and for Dallas, and specifically, for his depositors’ money. So, there he was, bred to wealth, power, and responsibility, standing astride the second-largest bank in the Southwest, custodian of the pipelines of credit, as powerful with money in Dallas as the Arabs are with oil. The traditional role would have been one of counseling, caution, and restraint. But 35 is the age for adventure, mobility, and risk-taking. What Stewart did was to change the bank, but cautiously; to get it moving, but slowly. His determination was to change First National’s traditional complacency into aggressiveness. The problem was where to do it and how to begin.
Faced with Republic’s commanding lead in deposits and assets, Stewart and Presley decided to focus their energies elsewhere. “Our goal was profits,” Stewart says. For most businessmen, such a statement would be simple-minded at best: all businesses want to make profits. But while for years banks had been impressed by potential borrowers whose techniques of modern management isolated costs and revenues, they had not conspicuously done the same at their own institutions. Stewart and Presley unabashedly initiated a profit program at First National. They placed executives in charge of cost centers throughout the bank, each with a bonus incentive plan tied to the profits derived from his center. When the bank began acquiring other banks, the profit system was extended to each bank in the empire. Reporting systems were standardized, and the resulting network of profit plans rests in two small black notebooks on Stewart’s desk.
The profit system is run by a young aggressive staff. Attracting bright young people to banking in the Sixties was no easy task. The glamor businesses like computers, electronics, and investments were siphoning off the best talent. Banking was still saddled with the image of legions of Martin Chuzzlewits hunched over rows of high wooden desks entering the deposits and withdrawals for the day with quill pens. Stewart and Presley tried to rid their bank of that image. Their first step was to implement a retirement policy for the bank’s board of directors. (One glance at the photographs of any randomly chosen bank’s board amply illustrates just how important that retirement policy was.) Only two members of the board which named Stewart president in 1960 still serve. “Getting a good board was one of the most important things we did,” says Stewart.
Last year, First International, the holding company Stewart and Presley created, passed Republic in deposits.
The two men have revolutionized their bank. They have made it into a business, added cost and profit control and incentive bonuses, placed their stock on the New York Stock Exchange, and recruited a group of hungry professionals. At the same time they have consciously preserved the bankers’ virtues. They are calm, collected men. They do not hurry. They do not glance at their watches. They do not give the impression they are hustling, riding the edge, or taking any chances whatsoever. One feels his son’s paper route money would be safe with them.
Stewart was expressing that spirit of stability when he said, “Dewey and I are here at seven every morning because that’s just how banking is. Your customer doesn’t want to come in at nine and find you in a meeting.” Now such considerations certainly are important at the Pflugerville State Bank, but it’s been some time since someone strolled in off the street to ask Bobby Stewart about a loan to add on to his house. The reality may be long gone, passed down the ladder of corporate responsibility, but the myth is kept up, kept up even as Stewart and Presley run a $5-billion holding company, and conceivably could be in meetings all day, every day.
Presley and Stewart refer to themselves as “commercial bankers.” They want to appear to be doing the same thing they have always done: banking. But since they formally left the bank in 1972 to head its holding company, banking is precisely not what they are doing. The group of professionals they have assembled at First International simply cannot be described as bankers. They are empire builders, with a vision- ary gleam in their eyes.
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