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2013 IB Hall of Fame

(page 2 of 5)

Corey Chambas: Underwriting Growth

“It is quite an honor. It’s humbling. I was hoping I wasn’t old enough to be a Hall of Famer yet. I feel I should be nearing retirement or something like that, but it is quite an honor.”

At age 51, Corey Chambas is not the first “youngster” to be selected to our HOF, but he shares a common trait with those who preceded him — business acumen. While the 2008-09 recession and the financial stress it caused put a lot of gray hair on the heads of bankers, First Business Bank, the anchor of First Business Financial Services’ corporate structure, was better positioned than most. Chambas deserves some of the credit for that, for he was part of a management team that navigated through some rough seas.

In the early 2000s, Chambas was among the bank executives warning about the risky investments some banks were making, and the 2008-09 financial crisis would demonstrate how prescient he was. The recessionary environment would leave some marks on First Business Bank, but it remained profitable because it did not take exotic risks in its investment portfolio; instead, it took on risk in its loan portfolio, “where we think you get paid more appropriately for taking risk, and we think we can underwrite the risk, and we think that’s part of our core skill set,” Chambas explained.

Some decisions are learning experiences. First Business went public in 2005 without an initial public offering, a decision Chambas now regrets because, without an IPO, it took more time to garner research coverage and gain institutional ownership, which suppressed stock activity. “Our trading volume would have been more robust if we had analysts covering us from the beginning, if we had institutional ownership from the beginning,” he acknowledged. 

Like other banks, First Business saw its stock price sink below book value during the recession, and management waited for the stock to recover — when it made more sense for shareholders — before pulling the trigger on an IPO. That occurred in 2012, when the bank raised $29 million in capital with an eye toward growth. “With all the disruption in the banking industry, we’re pretty optimistic about the future,” Chambas stated. “We’ve grown loans for the last four quarters, which is unusual for the industry.”

FBFS has also expanded into new business lines. In 2012, it got into the accounts receivable factoring business, and it opened an equipment finance office in Kansas City, which conducts business on a broader geographic basis. Chambas described factoring as a financing option for younger or faster-growing companies that have trouble getting the financing they need. A new company might have only one client, a situation that makes it difficult to do standard commercial lending. On the other hand, if that client is a large and healthy corporation, the receivables the new company gets are “valid and valuable.”

“The factoring is a way for these fast-growing companies to get help with their cash cycle,” Chambas noted.

James Garner, who nominated Chambas for the Hall of Fame, believes Chambas’ legacy is helping to grow a local business bank into a $1 billion public company that, in turn, has assisted in the growth of a significant number of local businesses. Chambas feels good about what he’s accomplished, particularly the sharing of business knowledge, but he’s still in the progress of building a legacy.

“Several parts of our company are still at either adolescent or immature stages,” he said. “We have several business lines and banking locations that have room to grow.”


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