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Springfield, MO

Systematic Savings Bank board replaces president

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President Michael Brady left Systematic Savings Bank after three decades – the last several years marked by increasing financial losses.

“The board felt it was time to shift gears,” said bank board Director Jeff Seifried. “Michael has been a loyal employee, but it’s a new day at the bank.

“Systematic is focused on growing out of the hole it’s in.”

Derek Fraley quickly took the reins July 19, after being drafted from BancorpSouth Inc. (NYSE: BXS) where he served as vice president and commercial lender since mid-2014.

“There is a unique opportunity here to grow a small institution,” Seifried said. “We interviewed a lot of candidates, and Derek met all the qualifications and then some.”

Reached by Springfield Business Journal during his second day on the job, Fraley already was strategizing ways to increase the bank’s deposits and loans.

“We’re a 94-year-old institution,” he said. “We’re going to celebrate 100 years here soon and I want to celebrate the 100 years with a great earnings year – I want to celebrate our 95th year with a great earnings year.”

Facing net operating losses of $667,000 in 2016, $445,000 in 2015 and $265,000 in 2014, Fraley said the board has charged him with turning around the financials.

His plan includes a continuation of changes Brady put in place to move the institution from a savings-and-loan model to a conventional bank model, with more commercial loans.

“We’ve slowly rolled out full-service products over the last three years, frankly products people expect from a bank,” said Seifried, the Branson/Lakes Area Chamber of Commerce and Convention and Visitors Bureau president and CEO who has served on the board sine 2013. “But it’s taken a lot of time.

“We’ve also been hampered by regulations. The No. 1 thing will be managing those.”

Fraley also wants to increase the number of short-term loans and decrease the number of long-term loans in order to protect the bank from rising interest rates.

“In other words, take something that’s very long and sell it into the market, and go into something a little shorter. So as the yield curve rises, we have the opportunity to keep reinvesting into a higher yield curve,” he said.

He’s identified the bank’s need for new deposit offerings to attract more liquid capital, possibly borrowing wholesale money from other banks in order to increase loan capacity.

Systematic has operated downtown at 318 South Avenue since 1923 and officials added a loan center in December 2016 at 1322 E. Kingsley St. While a downtown stalwart, Seifried said the bank’s name isn’t widely known.

“We want to strengthen our downtown partnerships,” he said, alluding to the bank’s upcoming marketing strategy. “There are 50,000-plus students to serve right here. We want to get our name out there in ways we haven’t done in the past.”

Systematic has about $30 million in assets. At BancorpSouth, Fraley comes from a multistate regional bank with $14.8 billion in assets. He’s also worked for Guaranty Bank and UMB Financial Corp. during his 19-year banking career.

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