Springfield, MO

Tim Parrish says he is taking a risk, leaving his job to start a new trust company.
Tim Parrish says he is taking a risk, leaving his job to start a new trust company.

Missouri Trust earns rare charter

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After a thorough review, Missouri Trust and Investment Co. received approval of its charter from the Missouri Division of Finance July 5. Launching this new venture, a team of established certified public accountants, attorneys and financial consultants navigated a process so rare, even some government officials involved had not handled the procedures before.

Nondeposit strategy
CEO Tim Parrish said the new institution is the only independently owned trust company in the Queen City, after Springfield Trust and Investment Co. was purchased by Central Trust & Investment Co. in October 2009 and Trust Company of the Ozarks was bought by Simmons First National Corp. (Nasdaq: SFNC) in November 2015. In fact, several of the staff members are former employees of those acquired companies.

Missouri Trust isn’t owned by a bank – and that’s a significant key to its strategy.

“A lot of referrals for a trust company come from bankers,” said Parrish, who helped start Trust Company of the Ozarks in 1998. “And there are banks throughout the state that for one reason or another do not have their own trust department. They really didn’t have a good place to refer their customers except to a competitor.”

The nine-member staff offers trust management, investment management, IRAs and financial planning, with most accounts having a minimum value of $250,000.

David Richards, chief investment officer, shareholder and former senior portfolio manager at Simmons Bank, said trusts are legal documents that describe how large sums of money should be handled during a person’s career, during a period of incapacity or after a person’s death. A trust company writes and manages those documents for clients, in an impartial way, so that families don’t get caught in conflict.

“Mom and dad don’t want to leave children a huge lump sum of money on the day they pass.There are several reasons for that,” he said. “Money held in a trust is not subject to creditors; it’s not part of a divorce. And it also prevents Johnny from going to Vegas and blowing several hundred thousand dollars at one time.”

As a nondeposit company, Missouri Trust will manage money through stocks, mutual funds and annuities held by its custodian: Fifth Third Bank (Nasdaq: FITB).

The company already has potential clients who made verbal commitments to move their accounts, with the process usually taking four to six weeks.

Jumping through hoops
Approval of a trust company is a complex and rare process, said Micky Hull, a review examiner for the Springfield and central Missouri regions at the Division of Finance. Proposed businesses are vetted in regards to their business strategy, their technological systems and the amount of capital raised.

“They provide biographical financial information on the organizers and principal management team,” he said. “It provides general information on the fitness of the individuals for the tasks and roles that they will be undertaking to make sure that they are essentially qualified.”

During the planning stage, Missouri Trust raised $3 million from shareholders in startup money, Parrish said. There are 48, mostly undisclosed, shareholders, including six attorneys, four CPAs, six bankers, 13 bank investors, four real estate agents, two insurance agents and two brokers.

“We are very well capitalized,” Parrish said. “And the stability of that is an important piece of the puzzle.”

If the application process goes well, Hull said, examiners are sent to the proposed company’s office to do an on-site inspection.

Missouri Trust currently operates from a temporary office at 3828 S. Fremont Ave. until construction of the new National Place office building finishes in November at 3100 S. National Ave.

“They spent a fair amount of time asking questions and evaluating the market, too, to see if there’s room for another trust company,” said Jeremy Lofin, the Missouri Trust’s chief administrative office and a shareholder who worked as vice president and relationship manager at Central Trust Co.

“This is the first charter application we’ve had in a good many years,” Hull said.

In fact, Hull said, this is the first trust charter he has ever received during the four years he’s overseen bank and trust applications in Springfield or during the previous three years he examined St. Louis institutions. There are some other applications in process, he said, but not in this region.

Structure and Staff
The office will run a fee-based service, not selling any proprietary mutual funds or annuities, Parrish said.

“We have nothing to sell them other than service,” he said. “So, if their account is growing, so is our fee. If their account is declining, so is our fee.”

Missouri Trust’s employees are a stitched together tapestry of former area trust company employees.

The board of directors, which is comprised of shareholders, includes Parrish, David Appleby, Bob Helm, Tim O’Reilly, Nancy O’Reilly, Teresa Hall and David Healy.

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