Steve Smith with 22nd State Bank

Steve Smith with 22nd State Bank

On this week's episode, Marcus sits down with Steve Smith. Steve is the president and CEO of the 22nd State Bank. Listen now to hear his story about overcoming stagnation and finding his calling in leadership.

Produced by Blue Fish in Mobile, Alabama


Steve Smith: I am Steve Smith, president and CEO of 22nd State Bank.

Marcus Neto: Awesome. Yeah, no it's great to have you on the podcast. So I know we were talking beforehand and we met at the chamber event, I guess it was October of last year or so. It's nice to finally get you and to sit down and talk about some of the things that you have going on.

Steve Smith: I appreciate being here, and congratulations, by the way, for that award.

Marcus Neto: Yeah, I've stopped talking about it on the podcast because it has been almost a years, but the small business of the year thing. I guess I can brag about that until the next announcement of the small business of the year, so until then I guess I'll just keep kind of talking about it.

Marcus Neto: But the way that we normally get started is we want to hear some of the back story of the person that we're talking to. So tell us where you're from, where'd you grow up, where'd you go to high school? I'm assuming that you graduated from college, because most presidents of banks have a tendency to have degrees.

Steve Smith: Yeah. You're right.

Marcus Neto: And so where'd you go to college? What did you study? You know, just give us some of that information.

Steve Smith: Sure. Great. So I'm from Montgomery Alabama originally. Grew up there, same home, pretty blue collar roots there. Went to Robert E. Lee High School back in the day. Ended up graduating from Auburn in Montgomery, moving to Birmingham Alabama, and spent most of my adult life there.

Steve Smith: Kind of one of those things, you never really know what you want to do when you grow up. I had a business degree and fell into the banking business just by default, and liked it and stayed.

Marcus Neto: For the record, I still haven't figured out what I want to do when I grow up.

Steve Smith: I'm still searching at times. I think I've landed a pretty good gig here, though.

Steve Smith: But I am married to a Mississippi girl. I have two kids. My son Clem is 10 and my daughter Lily Margaret is seven. So...

Marcus Neto: You said you've studied business. Was there a concentration there, of accounting or something like that? Or what did you-

Steve Smith: Finance.

Marcus Neto: Finance.

Steve Smith: I started out, was going to be an engineer, and then I was going to be an attorney, and then I just needed to graduate.

Marcus Neto: Yeah. I know that feeling well. That was my same situation too. So...

Steve Smith: Yeah, so that's kind of my back story.

Steve Smith: We're excited about opportunities ahead of us coming to Mobile, so obviously you having us here, we appreciate that.

Marcus Neto: Yeah. No, absolutely. We'll be getting into that here in just a minute.

Marcus Neto: But tell me what was your first job, not out of college, but your first job. And were there any lessons that you still remember from that?

Steve Smith: Yeah. So like a lot of young men growing up, I mowed grass in my early days. But my first real job was at Chick-fil-A. I was 15, working in the mall. And the had this position there called crew leader. And it was like this quasi manager, if you will. And from day one I said I want that job.

Steve Smith: And there was just something about being a leader and in a leadership position that was attractive to me. Folks follow good leaders. And I wanted to be one of those. And that's kind of how I started my career.

Marcus Neto: That's really cool. So I mean it'd probably be very easy to say like, that has carried you through life. Like that desire to be crew leader turned into the next position that you wanted to achieve and so on and so forth, until now you are president and CEO of a bank. So I mean I guess that's extremely formative.

Marcus Neto: But have you done any kind of self analysis to figure out what it is intrinsically that has driven you to do that? Is there something there?

Steve Smith: You know, you look back, and hindsight's always 20/20, right?

Marcus Neto: Mm-hmm.

Steve Smith: But it seems that I was never happy with where I was. It was always what's the next step? And leadership seemed to be those roles where you continued to grow in a career, in whatever it was. Whether it was owning a business, you became the leader because it was your business, or if you're working for a large corporation, what is that next step? What is going to take me to the next level? And that's what really drove me.

Steve Smith: And as I look back, it's always that I'm happy doing what I'm doing and I like the job. But I always feel like there's more that I could be doing. So it's always looking for that next opportunity, and that's what drove me into the leadership space.

Marcus Neto: Yeah. Cool. You mentioned that you come from a blue collar family. What do they do, in general? Like, you don't have to get specific if you don't want to.

Steve Smith: My father was a meat cutter. He worked three jobs at one time. He worked in the grocery store. And my grandfather had a small meat market, so my dad would work there during the day, and then had two different jobs at other grocery stores to help give us the things, if you will, that kids want growing up.

Steve Smith: So I come from a long line of pretty hard workers, if you will.

Marcus Neto: Well and then I guess it's safe to say that that was probably the seed that was planted that made you want to be the crew leader, that made you want to achieve and never be satisfied, but continue to learn how to grow and stuff like that. Seeing the sacrifices that... Because I'm just speaking from personal experience.

Marcus Neto: My father made a lot of sacrifices for me growing up. I mean he was a single father working the night shift at a fast food restaurant as manager. And I look back now at some of the things that he did for me, and I'm almost embarrassed what I asked of him. You know.

Marcus Neto: But I know that that's driven me to want to be as much as I possibly can, because I saw those sacrifices that were made early on in my life.

Steve Smith: Yeah, I think that's a good point. My grandfather and my dad, they didn't go to college. They came up through a time were you work hard, you do what you have to do to take care of your family, kind of thing. Married young.

Steve Smith: And so yeah, that... I always worked. I worked a couple of summers on a roofing crew, and I knew that that's not what I wanted to do.

Marcus Neto: Especially in Alabama. Golly.

Steve Smith: Exactly right.

Marcus Neto: It's like 180 degrees up there at times so-

Steve Smith: And you can't see me obviously, but I'm pretty fair skinned, so I don't do well in the sun.

Marcus Neto: ... Yeah. SPF 5,000.

Steve Smith: That's right.

Steve Smith: So yeah, I always... You look back and you feel bad for things that maybe you took for granted as a kid as you said. But my folks worked really hard to provide for us, and I guess maybe this is a way of trying to make them proud as well.

Marcus Neto: That's really cool. Now do you remember the first time that you... or maybe the first position that you had in a bank where you thought okay, this is it. This is where I'm going to spend the rest of my life. Or maybe you still haven't.

Steve Smith: Yeah. As far as banking is concerned, yes. I was with a much larger bank, a national bank. And I was running a line of business, and it was in the early 2000s. And at the time money was really good and I was traveling. And I thought this is what I'm going to do forever.

Steve Smith: So yeah, I didn't necessarily realize it was going to take me to where I am right now, but I felt like that was the career I was going to have.

Marcus Neto: Yeah. It was the calling that you felt like you could fulfill.

Marcus Neto: Now if you were talking to someone that wanted to get started in running their own business, what's the one bit of wisdom that you would impart to them?

Steve Smith: Dream big. Especially today. There's so many opportunities... folks to start their own businesses.

Steve Smith: Don't let money be a constraint. There's a lot of opportunity there. And it goes back to maybe one of our core values that we can talk about later, which is grit. It's to see things through no matter how hard it gets.

Steve Smith: But I tell our kids this all the time: you can do anything that you put your mind to. America is a great place to be, and you truly can do what you want.

Marcus Neto: Yeah. I'm first generation, so I get it. And I think that also is part of what drives me. But I tell my boys the same thing. Like, regardless of whether you go to college or you don't go to college, and regardless of what your passions are or what you want to do in life, if you want to do it you can. You just need to really kind of buckle down and do the work that it takes to get there.

Marcus Neto: It's an important lesson for kids to hear, because I think often times in the past we've pushed them into this kind of path that we thought was going to be success, right? So, leave high school getting good grades. Go to college. Get good grades. Study something that's appropriate. You know, get a degree and then enter the job field. And you have a career in whatever it is that you studied.

Marcus Neto: And you know, those things aren't necessarily coming true anymore. It's more like you have to find your niche. You have to find your grit. You have to find your experiences and kind of go down that path with them. So...

Marcus Neto: Now tell us a little bit about what you're currently working on. I know a little bit about that, but I'll let you kind of explain some of the things that you're doing here in Mobile.

Steve Smith: Yeah, so the easiest way I like to explain it is that we're a 101 year old startup.

Marcus Neto: Yeah.

Steve Smith: We have some pretty deep roots. Our bank charter is... Well, we're working on 102 now. We started in 1917 in Escambia County as your traditional community bank.

Steve Smith: And the bank has changed hands. Back in 2012 a local timber family purchased it. It was during the downturn. It got in trouble like a lot of small banks. A lot of real estate exposure. And they wanted to save their hometown bank. And they did.

Steve Smith: I was hired to help grow it. And so I'm not a traditional banker, even though I grew up in the traditional realm of banking.

Steve Smith: We really want to focus on entrepreneurs. I have found through my time, and especially during the downturn, I left banking for a little while and worked for a private lender and investor. And have found that people... there are opportunities there. There are good operators that don't have access to capital or capital is too expensive, and they're giving their companies away.

Steve Smith: So we want to be a conduit, if you will, for those businesses that need a partner, and they want to give everything up. And there are opportunities to do that, and to borrow traditionally, and have a place to deposit and put your money.

Steve Smith: And so that's what we're doing. And Mobile happens to be a place that I was not very familiar with, being most of my career was in Birmingham. We had a small loan production office here, and I got to know the city a little bit over the last couple of years and have fallen in love with it.

Steve Smith: There's a lot of opportunity here that we feel like we can be a partner and not just a traditional bank in the sense that most people think of, and so-

Marcus Neto: Well I'm curious because... And forgive me if you're an audience member and you hear me say this a lot. But I mean the whole reason we started this was to kind of showcase the cool things that entrepreneurs were doing in the city of Mobile. Because I'm not from here either.

Marcus Neto: And one of the things that drew me to Mobile was that entrepreneurial spirit, the idea that there are... I think Bill Sisson came on a month or so ago and said that there were like 30,000 micro businesses in the city of Mobile. And that wasn't a chamber stat, that was a study that had been done where they had actually done some calculations and talked to a number of people.

Marcus Neto: And so you, as an outsider, what are you seeing in Mobile that's making you, because it's not an insignificant investment for a bank to move into an area. And I know you're renovating a building and getting ready to move in with some real force into this area.

Marcus Neto: So what is it that you see that's drawing you to Mobile?

Steve Smith: Okay. So when you look around and say, just drive downtown Mobile. And it seems like there's a little area there, and we're going to be one of them, that every corner you look at there's a bank there.

Marcus Neto: Or a lawyer's office.

Steve Smith: Or a lawyer's office. That's right. And you need us all.

Steve Smith: You know, we lose sight of the bread and butter of our economy, and that's the small business. And so you see Austal here and you see some of the larger manufacturing firms, but there are companies that feed those firms. And I'll give you an example.

Steve Smith: Out on the water there's this small business. He makes these little water pumps, and he was struggling to find capital. Had great opportunities to serve some of these larger businesses, but wasn't able to buy the inventory.

Steve Smith: They often get overlooked. Banks grow, and they focus on the large companies. We find, in Mobile, there's a spot for a bank like ours that can come in and help that small business and build relationships for life.

Steve Smith: And so with the current administration, they've done a great job cleaning up downtown, putting the infrastructure there. Technology today. Businesses growing quicker. There's opportunities. And we want to be there to serve those folks.

Marcus Neto: Yeah. No, and you're saying a lot of the things that I see as well. I mean it's phenomenal to see the changes that are happening here.

Marcus Neto: And I want to stop for just a second, just as an opportunity, because you're mentioning some things. And I think it's worthy of stating this. But one of the things that as an entrepreneur you will often experience is that when you start up, especially if you're starting up and it's a business where it's a service based business. So you're a CPA or a lawyer or an advertising agency or whatever. You'll find that you really don't need a whole lot of money to start up, right?

Marcus Neto: But over a period of time, there comes a time where you're going to start using credit cards in order to grow the business. But then you get to this point. You know, there's like a pivotal point in an organization where it's like, I need a large amount of capital in order to either buy inventory or to do something that grows the business more significantly.

Marcus Neto: So if it was a service based business, maybe I'm trying to buy another service based business and absorb their clientele or something like that to get to a position of grown.

Marcus Neto: And I tell every business owner that it's extremely important for them to find a business... or I'm sorry, a bank that is focused on building community, and build a relationship with them. Because that relationship with a bank can be pivotal in helping them get over those growth humps where they need an infusion of cash. And it's better to do that when you don't need the money than it is when you're strapped and you have to go to the bank and say listen, I'm really struggling. Because I'm sure you would parrot that as well.

Marcus Neto: Like, it's a lot easier when somebody's healthy and that you can see the growth pattern and the trajectory that they're going, verus somebody that's kind of really having some difficulties and they've gotten themselves in a pickle. So...

Steve Smith: You're right. The old adage, I can borrow money when I don't need it is alive and true.

Steve Smith: And that's where we have to separate ourselves a little bit. A lot of it's building those relationships and believing in the person running the business and understanding their business.

Steve Smith: And I find that bankers sometimes live in a box. Bankers are great and there are great bankers out there. But if you don't truly understand the business and the person running the business, how can you really help them other than just looking at numbers?

Steve Smith: And sometimes the best thing I can do is tell someone no. But sometimes I can guide them to money that maybe I'm not giving them. Because my job as an advisor is to help them, to help the community.

Steve Smith: A community bank is very different today than it used to be, right? So we have to have a digital presence just like the larger banks in order to compete.

Steve Smith: But a lot of things that I find in the communities is that the average American doesn't understand what a community bank does or why it's important to support their community. They think in terms of just borrowing money.

Steve Smith: Well you've got to have money to lend. So we need depositors to come in the bank. And when you're putting your money there when you don't need it, it makes it a whole lot easier to get it when you do.

Steve Smith: And it's just an education process.

Marcus Neto: Yeah. It is an important part of the infrastructure that builds a community. And it's definitely something that's needed.

Marcus Neto: If you look to the business world, is there a person that motivates you or that you're kind of inspired by?

Steve Smith: There's probably several I could name, but probably the one that's had the most influence on me was my grandfather. He was a small business owner. He did not live extravagantly and he provided very well. He grew up during the depression. He saved every penny, to the point that sometimes as he got older like, come on granddad, just live a little bit.

Steve Smith: But he worked really hard, and he's always taught me whether it's your money or someone else's, you give 100 percent no matter what. You don't call in sick just because you don't feel great that day. People are depending on you whether you're selling a product or providing a service. And it is your job to be there.

Steve Smith: And so I would have to give him the nod.

Marcus Neto: Very cool. And are there any books or podcasts, people or organizations that have been helpful in moving you forward, personally, not as an organization?

Steve Smith: Yeah. So I'm on the road a lot. So I'm listening to books more than I'm reading today. But I do think it's important to read.

Steve Smith: I'm a big fan of Warren Buffett. And really when you break it down, it's know what you know and know what you don't know.

Steve Smith: I didn't grow up reading for fun. I read either because it was an educational tool or for business.

Steve Smith: But Warren Buffett is somebody... You look at bankers, and sometimes you hesitate to say what great bankers are out there that you look up to. But Jamie Dimon has done such a great job. He speaks his mind. And so I do appreciate what he's done with the organization that he has.

Marcus Neto: I'm not familiar, I'm not in that industry, but who's he with?

Steve Smith: Jamie Dimon is JP Morgan Chase, and he gets grilled all the time by Congress, and he holds himself well. And he never wavers in what he believes.

Marcus Neto: Very cool.

Steve Smith: And so I can appreciate that. It's a tough industry to be in right now.

Marcus Neto: Especially I'm sure... Yeah, that's a grilling that I would not want to be under. So...

Marcus Neto: What's the most important thing that you've learned about running a business?

Steve Smith: No day is ever the same.

Marcus Neto: That's an understatement. Yeah.

Steve Smith: Yeah. So I've been in management roles and managed a lot of people. But when the buck stops with you, things change. And whether it's picking up trash, cleaning a bathroom, or making the decisions that are pretty tough decisions based on people's career, et cetera, you have to make those decisions. And it's challenging and rewarding all at the same time.

Marcus Neto: Yeah. Yeah, there are days where you want to crawl under a rock, but those are the days that make you stronger for the days that are ahead. Right?

Steve Smith: That's a good way to hide it. Sometimes you just don't want to get out of the covers.

Marcus Neto: Yeah. Preach. There have been some of those days in my life too, so...

Marcus Neto: Now how do you like to unwind?

Steve Smith: Oh, wow.

Marcus Neto: I know. It's specifically worded, and I keep saying this. Like, I used to ask what do you like to do for fun? And most business owners will tell you, well I don't have time for that. But you know, you have to do something to unwind. There's something that kind of brings your blood pressure back down to normal.

Steve Smith: Yeah. So I like to cook. I'm a want to be chef.

Marcus Neto: There you go. I'm like minded there, so...

Steve Smith: Yeah, I even looked, at one point in time, redirecting my career and going to culinary school. They work way too hard for me. Take the fun out of it. But I really love to cook. And my wife and I like to eat good food and drink wine and-

Marcus Neto: What's your favorite dish to make?

Steve Smith: ... Oh wow. I'm a griller by nature.

Marcus Neto: Okay. Some ribs or something along those lines?

Steve Smith: Yeah, but I'm really more partial to winter meals. I like to braise meats, slow cook, and-

Marcus Neto: Nice.

Steve Smith: ... Yeah.

Marcus Neto: Yeah, I actually went home at lunch, so I've subscribed to Hello Fresh. And I like that because it gets me out of my comfort zone and makes me make dishes that I wouldn't normally make, you know. So I went home at lunch today and made one of my Hello Fresh meals, and it was kind of a nice way to kind of break up the day and change the focus into what we're doing now, which is recording podcasts.

Steve Smith: Sure. Yeah, I need to be working on Hello Healthy meals. Everything I cook is butter and rich sauces.

Marcus Neto: There ain't nothing wrong with that. Paula Deen knows something, so-

Steve Smith: That's right.

Marcus Neto: ... But... Well tell people where they can find out more information about 22nd Bank.

Steve Smith: Yeah, that's great. So we're at That's We are really investing heavily in our digital presence now. So website's a work in process. But we got a new website up and running.

Steve Smith: LinkedIn page is now up and running. And working on the Facebook page right now. So-

Marcus Neto: Very good.

Steve Smith: ... really excited about that. So it's

Marcus Neto: Awesome. Well I want to thank you again for coming on the podcast. We'll wrap up any final thoughts or comments you'd like to share.

Steve Smith: Well Marcus, I appreciate you having me. You've got a great operation here, and we just really look forward to being in Mobile and serving the community here.

Marcus Neto: Yeah, well what's your timeline on... do you have... I mean if you don't want to say-

Steve Smith: Yeah. No, no. I can't be definitive. There's still... we purchased a building: 51 Saint Joseph, for those of you who are listening-

Marcus Neto: Right downtown.

Steve Smith: ... the Taylor Martino building. They are moving out in May, and we will start our renovation then. So we hope to be there late third or early fourth quarter.

Marcus Neto: Very good. That's awesome. Well Steve, I appreciate your willingness to sit with me and share your journey as a business owner and entrepreneur. It's been great talking with you.

Steve Smith: Thanks for having me.

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