Building from Scratch

“I love being around people, and people are what community banking is all about.”  —Shirley Nelson, Summit Bank
“I love being around people, and people are what community banking is all about.”
—Shirley Nelson, Summit Bank

Overcoming various long odds over the years, Shirley Nelson launched and then grew a thriving California community bank

By Beth Mattson-Teig

National Award Recipient
Shirley Nelson, Summit Bank
Titles: Founder, chairman and CEO
Bank Headquarters: Oakland, Calif.
Bank assets: $210 million
Branches: 3
Employees: 33

Shirley Nelson has built a nearly 50-year career doing two things she loves—community banking and giving back to her community. And she has no plans of slowing down anytime soon.

“I love being around people, and people are what community banking is all about,” she says. “We help people and we support them in their businesses. We support the nonprofits, and they in turn support the communities that we all live in.”

Like a craftsman bricklayer steadily assembling a sturdy house, Nelson built her successful career and her community bank in Oakland, Calif., one piece at a time. Her banking career began in 1964 when she was a new wife and young mother. Since then, she has worked in nearly every operational area to gain firsthand experience, from her first job as a bank teller to her current role today as the founder, chairman and CEO of Summit Bank.

Nelson clearly has a passion for community banking, an industry she landed in by chance. “I was under the impression that being a banker required a lot of education, and I had only attended high school.”

She grew up in a small town in Eastern Tennessee. She got married to a Navy man and moved with him to Kodiak, Alaska, where she had a son. There, she sought work to help with financial support of her family. In the 1960s, there were basically two kinds of jobs for women on the island of Kodiak—working in the bank or working in the fish cannery.
“After one night in the cannery, I chose the bank,” she says.

Two years later, Nelson moved as a single mom to Oakland, where she again found a job as a teller at a regional bank. She says she was fortunate that the bank offered her the opportunity to grow and advance, particularly in an era when banking was a male-dominated industry. She worked her way up to become a senior vice president and senior manager of that regional bank. That was a big promotion for a woman in the 1970s, when some men chose to resign rather than report to a woman.

Blazing her own trail

Eventually, Nelson did run into the glass ceiling. She recalls being both angry and disappointed when a position at one bank—a position she had declined due to the low salary she was offered—ended up going to a man for twice the pay. That was a pivotal turning point for her career. She decided to launch her own community bank, and two and a half years later she did just that with the opening of Summit Bank—right across the street from the branch where she previously worked.

Nelson was the first woman in California to start a bank that wasn’t an exclusively women’s bank. Right away Summit Bank’s core customers were doctors, small-business executives and entrepreneurs. At the time, she was only the second woman in the state to hold the title of president and CEO.

“To start a bank in the ’80s was not an easy task, but after a two and half year process, Shirley Nelson did it and personally sold the majority of the stock to capitalize the bank,” says C. Michael Ziemann, a longtime co-worker of Nelson’s who also served as Summit Bank president until his retirement in 2013.

Summit Bank launched in the midst of a recession in 1982, which made people initially view her bank as a crazy venture. Yet the community bank has been profitable ever since its second month in business. Remaining profitable was a particular challenge for all banks at the time, Ziemann points out. Higher-rate money market accounts had just been widely introduced, squeezing core interest margins. The prime rate stood at 16 percent, and interest paid on jumbo certificates of deposit was close to 18 percent.

Despite those early challenges, Summit Bank has grown from a startup of $4 million in initial capital to a solidly established institution with $210 million in assets and three branches. It’s the oldest operating community bank in Oakland, and it has been voted by its peers five consecutive times as Northern California’s Best Managed Independent Bank.

So, how did she do it?

“If people have the passion, the desire and the interest, you learn what you need to do,” Nelson simply offers. Part of her success also is due to the relationships she had built, as well as the experience of the bank’s board of directors that she had assembled, she says. Together, the bank’s management team developed a good strategy that the bank was able to execute very quickly. For example, to put its deposits to work right away, the young bank joined some successful loan participations with other banks.

When Nelson decided to open Summit Bank, she didn’t yet have the full administrative experience that she knew was essential to getting the necessary regulatory approval to open a new community bank. So, she hired a president and chief financial officer, while she assumed the role of senior lender. Nearly a year later she assumed the position of president, and she admits that the transition to learn those executive duties on the job was the most challenging period of her career. But she did it.

Overall, her secret to success is fairly simple—hard work. “I worked hard to learn all the different basics of banking, because I didn’t know anything other than being a teller, and then I just went from one job to another to learn it.”
The decision to launch a new community bank came with plenty of personal sacrifices, too. The long hours required along the way meant missing some of her son’s Little League games and Cub Scout meetings. Eventually, however, her professional goals paid off in personal ways as well. Her son, Steve Nelson, now works alongside her every day as the president of Summit Bank.

Giving back to the community

The compasses that have guided Shirley Nelson over her career has been a tremendous tenacity and a big heart. Certainly, she is not afraid of hard, hands-on work. In addition to the countless hours she spent over the years learning different banking roles, and then starting and growing Summit Bank, she has continually donated her time to serve various local community civic and nonprofit organizations. She started out serving on her local board for the Easter Seals back in the 1960s, and her commitment to volunteerism spans much of her banking career.

“Shirley is one of the finest community bankers that I have met in my life,” says Malcolm Hotchkiss, CEO at United Labor Bank, another community bank in Oakland, Calif. “If you want an advocate for the community banking industry, you go to Shirley, because she really understands our role in the community as community banks.”

What is important to understand is that her reach in the community as a community banker has gone well beyond the service of providing deposits and lending products, adds Hotchkiss. Nelson is involved in numerous community initiatives, including her own Summit Bank Foundation, which was formed in 1998 to promote education, financial literacy and corporate volunteerism in the East Bay.

“She has invested a great deal of her own personal energy and wealth into this particular program,” Hotchkiss adds.

Since it launched in 1998, the Summit Bank Foundation has successfully raised more than $4 million to support both college scholarships and more recently, cancer research. The bank covers all expenses of the foundation so that 100 percent of the money raised goes directly to the causes they support.

During its first 15 years, Summit Bank was very involved in donating directly to local nonprofit organizations. But then Nelson saw a better way. “We realized that we really didn’t know how to quantify or qualify where or how the money was spent,” she recalls. Having better control and oversight over the money the bank directed to local nonprofit efforts was the impetus to form its own nonprofit foundation.

Initially, the Summit Bank Foundation focused on promoting corporate volunteerism in the East Bay community. It later moved to support financial literacy as well as education in general. Today, the foundation funds 11 college scholarships each year for high school students in the nine-county Oakland area. Nelson’s own diagnosis for lymphoma a few years ago opened her eyes to the help that doctors need to fund additional research. So in 2010, the foundation began providing funds for cancer research for doctors at the UCSF Medical Center.

These days, Nelson is busy charting a course for Summit Bank to continue growing without losing its personal touch with its customers. Some of Nelson’s clients today have been banking with her since the 1960s. “We never really wanted to grow to be a big bank. We just wanted to be the most profitable bank that we could be,” she says.

But given the current banking climate and regulatory environment, Nelson says there are some economies of scale that can be gained by expanding further. But as she looks to the future, for herself and Summit Bank, she has no plans to retire or even slow down anytime soon.

“I love what I do,” she says. “And I get a lot of satisfaction out of everything I do.”

Beth Mattson-Teig is a writer in Minnesota.