- Mar 29, 2022

True Grit

As more than two hundred other Oklahoma banks failed, how did two small town banking families survive the 1980s economic debacle, gradually gather wind in their sails, then rocket forward from the early ‘90s into multi-billion dollar financial institutions?

“Head down, rear up, working hard,” said H. E. (Gene) Rainbolt, founder of modern-day BancFirst, the largest state-chartered bank in Oklahoma. “Worrying, every night at 3 a.m. It was a tough time. Every day, we would ask ourselves: are we gonna make it?”

Gene, his son David, and their colleagues bear a lasting testament to Oklahoma that even when the world around you is spiraling downward, if you exercise discipline, wisdom, and poise, you don’t have to follow.

Gene worked from nearly the start of his bank owning career in Noble around 1960 to build better financial institutions than those of his “comfortable competitors” that owned many of the state’s banks. In Oklahoma’s era of unit banking laws, which prohibited banks expanding beyond a single location, he launched an ingenious long game strategy.

He began to purchase, with separate ownership teams, troubled small town banks. He simultaneously assembled a crack executive team known as Thunderbird Financial Corporation. Thunderbird functioned as a paid contractor, and delivered revolutionary, bottom-up budgeting, accounting, central investment, and loan quality processes to each bank. This expertise and uniformity enhanced each bank’s competence, while reducing their overhead.

Meanwhile, he worked for decades to eliminate those archaic unit banking laws so that successful Oklahoma banks could expand beyond one location and grow, helping rev up the state’s economic engine. With the ‘80s bust, Gene found “foxhole converts” among his former adversaries to the notion of multi-bank holding companies. Many of those “comfortable competitors” desperately sought a buyer before the feds shut them down.

His legendary 1983 oration to the state legislature electrified that body into authoring the first of a series of laws that buried unit banking. The next year, he formed United Community Corporation, Oklahoma’s first statewide, multibank holding company.

Crucial Head Start

David left Republic Bank in Dallas to join his father’s team in 1982. Father and son both came to consider the younger Rainbolt the more strategic thinker of the two. He proceeded to sharpen the company’s strategic focus and long game. He ramrodded a further round of organizational upgrades that included enhanced scrutiny of loan applicants’ credit quality, as well as the novel practice of a rigorous loan review process.

United began all this shortly before Penn Square collapsed (OKLAHOMANS 2, Chapter 13). It rejected the sort of profitable but risky loans that were seducing other state banks in that swashbuckling era. In fact, “We began moving the worst of our loans out of our bank, which gave us a crucial twenty-four-month head start,” David recalled, “before the real estate market tanked in 1984 or 1985, and before others realized how bad the state’s economy was.”

By 1989, as Oklahoma banks continued to fail, the state’s economy remained stalled, and the high-flying OKC and Tulsa banking communities lay in shambles, the Rainbolts shifted to offense. They merged their many banks into one—BancFirst. They moved for the first time into the big cities and cherry-picked top executives from shattered metropolitan banks.

In 1992, David became CEO and took BancFirst public, raising capital through the markets rather than debt. This allowed the organization to initiate next-level loans, as well as better weather cyclical economic downturns. As the decade unfolded and Oklahoma’s economic skies cleared, BancFirst became a financial juggernaut across a state littered with the wreckage of less prudent institutions.

Last Bank Standing

The bank population in Norman grew to eight by the height of the ‘80s boom. When the smoke cleared, only one of those survived with previous ownership. City National remained afloat, Norman native Gene recalled, because owner and banking legend Raymond Symcox kept his composure and all four Symcoxes in the business exercised good judgment.

Lee Symcox merged City National with American Fidelity Insurance owners Bill and Lynda Cameron’s First Fidelity Bank in 1992. Symcox has been part-owner, President, and CEO of First Fidelity since. It has grown into a multi-billion dollar institution. Lee was a green, twenty-something banker at City, though, when the roof caved in on Oklahoma in the ‘80s.

He chafed at his grandfather’s refusal to make a major loan to a prominent Norman real estate developer and City National customer. I told him, “We’re gonna lose this deal! All these other banks are growing like crazy, and we’re not!”

“The other banks are concerned with the wrong bottom line,” Raymond told his grandson. “They’re more worried with growing the bottom line of their balance sheet. I’m more concerned with growing the bottom line of my income statement.”

“You can be big and not make any money,” Lee said. “That stuck with me to this day. Anyhow, that developer got his loan somewhere else and was foreclosed on two years later. He went bankrupt and so did that other bank.”

“What the philosophy of my grandfather, dad, and uncle all boils down to,” Lee Symcox concluded, “is that you stick with your basic principles. Never let your competition dictate your rates, terms, and credit and loan decisions. If everybody had done that in the ‘70s and ’80s, it would have been alright. But people got their head over their skis and got away from basic banking principles, such as the customer’s ability to repay.”

The bold Rainbolts and scrupulous Symcoxes took different roads to success. But both made it, when most around them did not. People and communities across Oklahoma are fortunate they did.

Norman native H. E. “Gene” Rainbolt is well known as both a philanthropist, and founder and chairman emeritus of BancFirst, the second-largest Oklahoma-owned bank. After graduating high school, Rainbolt served as an artillery battalion intelligence officer in the Korean War. His son David remembered the key role the war played in his father’s long service to children: “Even as a child growing up, the most poignant stories he told about his military days was how distraught he was to see all the orphans in the Korean War. The thought of that many children growing up with very little chance in life was the most depressing thing he'd ever seen.”