Tri-state Bank brings in new interim CEO
Tri-state Bank has hired Memphis banking veteran Mike Edwards to head the iconic Whitehaven institution on an interim basis.
Edwards becomes the fourth chief executive in five years at Tri-state, one of 18 Black-owned banks open in the United States. He had led First Horizon Bank’s flagship Memphis office and recently retired as president of Paragon Bank in East Memphis.
Tri-state is replacing Darius Davis, who resigned as CEO in December and returned to Maryland for personal reasons. A statement released Tuesday by the bank says: “Davis returned to his Baltimore area home as COVID-19 continues to hinder travel and relocation efforts.”
The leadership change at the bank, which employs 22 people, marks another chapter in a critical period. Tri-state lost $866,000 last year, according to an FDIC report, marking its first profit loss since the difficult period following the nation’s 2008 economic crash, when losses totaled $4.8 million between 2011 and 2014. The bank cut employment and loan volume, particularly to churches, and sold its Downtown headquarters site.
Edwards will step into a bank on sounder footing than back then. He said the 2020 loss reflects in part the struggle of churches repaying construction loans after the pandemic cut tithing.
He has headed the bank for five weeks and will launch a search to recruit a new CEO later in the year. Until then, the bank will sell a vacant acre on Winchester purchased for a possible branch office and look into attracting more customers online.
“We need to grow our loans and improve our return on our loans,” Edwards said.
Tri-state, founded in the city in 1946 by African American insurance executives Joseph E. Walker and Maceo Walker, ranks among Memphis’ smaller banks, though it is widely known as one of the largest Black-owned businesses in the Midsouth as well as one of the nation’s few surviving Black-owned banks. More than three dozen banks owned by African Americans operated two decades ago throughout the United States. The closures are generally attributed to consumers moving their business to larger banks and economic problems among African Americans.
The bank originated near Beale Street when the Downtown district was home to one of the country’s largest concentrations of businesses owned by and serving African Americans. By 2001, Tristate employed 72 workers and had booked $73.6 million in loans and $117.4 million in customer deposits. As the 2008 recession came on, the bank cut back to 44 employees and deposits dropped to $71.4 million.
Five years ago, Memphis-based First Tennessee, now named First Horizon, and Memphis real estate investor Belz Investco injected money into the bank. First Tennessee bought $1.5 million worth of Tri-state preferred stock and Belz purchased the bank’s headquarters property at Beale and Main streets for $3 million.
The actions helped increase Tristate’s lifeblood, known as equity capital, which had been depleted as Memphians missed loan payments after the 2008 economic crash saddled the city with high unemployment for the next seven years.
Thomas Felder, the CEO hired to stabilize the bank, led its relocation from 180 Main to a new headquarters in a high-rise office building at 1407 Union Ave. and also enhanced its presence at a prominent location in Whitehaven, making the office at 4606 Elvis Presley Blvd. the key location for serving customers. The 90,000-population Whitehaven area is home to a large share of the city’s African American middle- and workingclass families.
Felder succeeded Christine Munson, a retired First Tennessee corporate banking executive hired in 2016 by Tristate. She promoted a millennial plan aimed at bringing in more customers in their 20s and 30s. Felder was succeeded in 2018 by Davis.
In a statement released by Tri-state, the bank’s chairman of the board, Memphis real estate investor Archie Willis III, says:
“We are grateful for Darius’ leadership. We understand his desire and decision to be with his family amid the ongoing pandemic. We are thrilled Mike has joined us. And we are confident in his ability to lead our team and help us grow. He comes to us at a time when the Bank is also navigating the challenges around the Corona virus, and its impact on African American customers and businesses.”
Tri-state at the end of September held $90.2 million in customer deposits and had booked $51.2 million worth of loans and leases. Equity capital totaled $10.5 million. The numbers are shown in reports to the Federal Deposit Insurance Corp.
Currently, the bank holds $90.2 million in deposits and has loaned out $51.2 million.