Investing in the future

Bank President and CEO John C. Schrup, who founded UAB in 2003, will now soon say goodbye to his downtown San Mateo office at 101 Ellsworth where he continued a family tradition.

“I had already been in banking 25 years, and our family, the Schrup family, has been in banking for 106 years headquartered back in Iowa,” Schrup said, while recounting the decision to open UAB. “I personally had decided that I didn’t want to work, after 25 years, with a quote-unquote big bank, I wanted to form a bank where I could better ensure excellent customer service with strong banking and a hand-picked team.”

Recognizing it was time to grow, Schrup said he was pleased when the San Jose-based Heritage came forward with interest in expanding into San Mateo County and acquiring UAB. On Jan. 11, the terms of the agreement were announced as Heritage will exchange its stock to UAB shareholders, Schrup said.

“It looked to be a very good fit, very strong bank, high performing, we’re both culturally similar in focus on creating excellent customer service and meaningful relationships with our [clients],” Schrup said.

He reassured customers the branches would stay open and they’re in the process of determining how accounts will be transitioned to Heritage. Described as a “community bank,” UAB has about $350 million in assets, Schrup said.

The company has grown in the years since Schrup decided to navigate the complicated legal process of forming a bank and broke onto the stock market raising $15 million during UAB’s initial public offering that attracted between 350 and 400 investors.

“We felt we could provide a higher level of service than some of our bigger bank competitors and we formed a very good team, a strong group of directors and a very supportive advisory board that helped the bank achieve success,” Schrup said.

The first branch opened on Ellsworth Avenue in downtown San Mateo in 2003. The first expansion was to Sunnyvale 11 years ago, a branch that was a bit too far from its home base and subsequently closed about three years ago, Schrup said. About a decade ago, UAB expanded into branches in Half Moon Bay and Redwood City. While business was stable, they decided it would be beneficial to expand, he said.

“However, it became difficult for us to grow to a size that allows you to have more economies of scale. We’re a $350 million bank, and my strong belief is that to really have a successful bank for your shareholders and investors, you’ve got to be a size of a billion or more in assets,” Schrup said.

About six months ago, they began entertaining discussions with other interested banks and Heritage came forward as a desirable candidate. That San Jose-based company has about $3 billion in assets and, while larger, is still considered a “community bank” with a reputation for positive customer service, Schrup said.

The acquisition is slated for consideration by UAB’s board, which is primarily comprised of the Schrup family’s Iowa-based holding company, in the coming months. He credited his family, local peers and UAB professionals for helping to forge strong community roots in San Mateo County. Aside from donations, a number of UAB directors and professionals serve a variety of local nonprofits.

“I grew up learning from my family that as a community bank, you need to strongly support and give back to the community,” Schrup said. “I strongly believe that you need to provide capital resources and human resources to help support the community you’re in. And the better the community does, the more it flourishes, the better chance I think you have to have a successful bank.”

The Midwest native ventured to California decades ago to attend Santa Clara University. He went straight into banking after graduating, and worked for several larger institutions before being encouraged by local mentors to start UAB.

Nearing his own 65th birthday, the San Mateo resident said he will likely retire in the coming months and spend more time with his family, which includes four children and a grandchild. He noted real estate investments might also be an opportunity down the road to keep him busy.

Praising the qualified staff and mentors with whom he’s been fortunate to work, Schrup said he’s learned some important lessons throughout his career.

“I think it’s important to treat people the way you like to like to be treated. And we’ve attempted to operate that way, with a lot of respect and care for our clients and for one another as a staff,” Schrup said. “I think that has translated into good service.”

Note to readers: This article has been corrected to show UAB raised $15 million, not $150 million, during its initial public offering.

samantha@smdailyjournal.com

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Twitter: @samantha_weigel