Competitors to Collaborators: Capitol Federal & Capital City Bank
Photos | Emma Highfill, Rose Wheat Photography
During the past year, several companies have acquired local businesses with complementary areas of expertise and compatible cultures. These acquisitions not only offer more opportunities for strategic growth, customer service, and employee recruitment and retention initiatives but strengthen Topeka’s economy and support a focus on quality of life too.
Merging entails multiple factors, from consolidating data systems, software and office space to integrating teams and informing customers about expanded capabilities. Recently blended accounting firms, financial institutions, and document management and IT support firms share the benefits they have already derived and the hurdles they have overcome as they have transitioned from competitors to collaborators.
Matchmaking
July 2017, Capitol Federal® was interested in expanding its commercial lending capabilities and Capital City Bank was interested in finding a partner that could acquire the company. After leading Capital City Bank successfully for decades, Frank Sabatini and his son, Matt, chairman of the board, were contemplating retiring but wanted to secure the bank’s future for its staff and customers before doing so.
An exploratory conversation between John Dicus, Capitol Federal CEO; Matt Sabatini; and Bob Kobbeman, former Capital City Bank president and CEO and now chief commercial banking officer at Capitol Federal, ultimately led to an acquisition that satisfied the needs of both entities.
“We’ve managed our businesses in similar ways, including our operating philosophies and cultures and business models that prioritize customer service and conservative lending,” says Dicus. “We went into this collaboration knowing that we had complementary niches and an understanding that we each needed the expertise of the other.”
Kobbeman says, “When you’re considering an acquisition, assessing people and talent is just as important as reviewing a book of business. On the Capital City side, it was extremely important for us to honor what Frank and Matt and the other Sabatini sons had accomplished.”
Merging People
When Capitol Federal and Capital City Bank closed their deal Aug. 31, 2018, they retained 90% of Capital City Bank’s employees.
Although the two Topeka banks had similar legacies of service spanning more than a century (126 years for Capitol Federal and 127 years for Capital City Bank), they differed dramatically in size and scope.
“One of the main things that our Capital City Bank employees had to adjust to was going from a $434 million family owned, state- regulated bank to a $9.3 billion publicly traded company with a national regulator,” says Dicus.
“Capital City Bank benefited from the acquisition because we were able to bring products and expertise in certain areas where Capitol Federal didn’t have those strengths,” says Kobbeman. “It’s been a positive, comfortable transition with teams coming together as equals to collaborate and ask questions.”
Dicus agrees. “Capital City Bank brought us a trust department, something we have not had before, but we have a large customer base in multiple communities so we can expand trust opportunities and experience growth in that area.”
The merged entity now has 783 employees and 54 branches in Topeka, Lawrence, Wichita, Kansas City, Manhattan, Emporia and Salina.
Managing Planning, Platforms and Possibilities
Capitol Federal and Capital City Bank’s biggest hurdle also involved database integration, which was completed in April 2019.
“Whether you were a legacy client at Capitol Federal or Capital City Bank, you could begin doing business at any branch once we completed this piece,” says Dicus. “It was a monumental effort by our IT staff to make this come to fruition. Now we can really say we are one organization.”
With Capital City Bank assimilated into Capitol Federal, Dicus acknowledges, “The process will never be over. We’ve just got the first lap done by integrating the databases. Now the heavy lifting starts as we take advantage of our alignment and grow the business as we provide our customers with new opportunities to work with us.”
Contributing to the Community
Capitol Federal and Capital City Bank have strong philanthropic traditions with extensive corporate and individual commitments to charitable causes designed to enhance Topeka’s economic vitality and quality of life. Dicus’s grandparents and parents instilled in him a desire to contribute, and Frank Sabatini did the same with his four sons.
“Our two families believe in giving back not only in dollars but in people’s time,” says Dicus. “We launched a charitable foundation in 1999 when we took the company public in April 1999, and it’s a commitment that we value and will continue.”
Praising Frank Sabatini’s generosity and affinity for Topeka, including his support of art and recreational resources throughout the city, Kobbeman says, “Capitol Federal’s reputation for charitable giving is something the Sabatini family shares—having that legacy continue through the merged institution was a huge attraction for our employees.”
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