Symphony Bank's palatial branch along East 96th Street-outfitted with a copper roof, towering domed ceiling and heated parking lot-was designed to telegraph wealth and stability.
But instead, the $5 million Taj Mahal became the most prominent symbol of the bank's excesses and one reason the startup has lost money every year since its founding in June 2005.
The bank, which has no other branches, has torn through two management teams and piled up annual losses of $2 million or more per year for three years. And there is talk in banking circles that Symphony may be looking for new investors.
Any sales pitch likely would rely on confidence in Symphony's third team of executives-a group led by CEO Bill Olds, a 30-year veteran of banks in Indianapolis including Fifth Third and National City. The new crew knows it'll take more than granite countertops stocked with Hershey's Symphony chocolate bars to turn the bank profitable.
Olds points to signs of progress since his team took over about six months ago: Deposits are up 98 percent, 200 new customers now are using Symphony, and loans are up 38 percent in a tough market. The bank's loan pipeline has ballooned to $25 million from $3 million. It has no subprime loans.
But challenges remain: Symphony will need about $150 million in loans and other earning assets to turn a profit, and the bank has amassed only a third of that in three years. Olds expects the bank, which has 21 employees, to reach profitability by 2009.
"Obviously, there are a lot easier jobs than this one," Olds said. "We all heard the stories in the marketplace about how difficult things were here. It's taken a great deal of effort to get things turned around and focused on the business plan."
A slowing economy and credit problems have made it a tough environment for all banks. And those trying to gain a foothold face even more of an uphill climb, said Mike Renninger, a principal with the Carmel-based banking consulting firm Renninger & Associates LLC.
"[Symphony] can ultimately be successful, but it'll take a lot of work," Renninger said. "They have some extra weight they're carrying that a more agile organization doesn't have to carry."
He said it's too early to judge the current team at Symphony, a group that has been successful elsewhere. The bank's executives are facing plenty of competition for loans and deposits.
Most startup banks are profitable at the end of three years, so bank regulators grow concerned when startups lose money year after year, eroding their equity position. Symphony's equity capital has dropped from about $12 million in 2005 to less than $8 million now, according to the Federal Deposit Insurance Corp.
Officials with the state's Department of Financial Institutions, which regulates Symphony, would not discuss the bank's condition.
"They have to figure out a way to stem the losses and turn profitable as soon as possible," Renninger said. "There's no question they've fallen far short of where they had hoped to be at this point."
One of Symphony's largest shareholders, Jasper-based German American Bancorp Inc., plans to stick with its investment in the bank. In 2005, it bought a 9.7-percent stake for about $1.5 million as part of a diversification strategy that also includes investments in Eclipse Bank of Louisville and the Bank of Evansville.
"We're pleased with the group [Symphony Chairman] Otto Frenzel has put together," said Mark A Schroeder, German American's CEO.
Frenzel, a third-generation Indianapolis banker, joined Symphony last year. His father led Merchants National Bank, a predecessor to National City, and hired Olds, the current CEO of Symphony. Frenzel did not return a phone call.
Symphony's founding CEO, Steve Tolen, could not be reached by IBJ deadline. In 2005, Tolen said the bank would differentiate itself with its service and luxury amenities, including specially designed ATM lanes that accommodate large SUVs.
The original business plan projected the bank would reach $100 million in assets within three years. Symphony now has about $45 million in assets.
Symphony officials are trying to make the best of a tough predicament, Olds said, trying to position the bank as a niche player focused on small businesses and entrepreneurs, taking a private-banking approach that did wonders for the city's largest locally based bank, The National Bank of Indianapolis.
"I'll close loans at the locker room at NIFS, at restaurants, in people's homes or offices," Olds said. "We're taking the bank to the people."
Behind the News will return June 2.