Deana Tillotson – InterBank

By any measure, InterBank’s growth has been a steady success. In about a dozen years, the bank, which operates in Texas and Oklahoma, has grown from $1.5 billion in assets to more than $4 billion.

Deana Tillotson, who’s an executive vice president and the general counsel, expects more success—she’s spent the past two years preparing for InterBank’s assets to exceed $5 billion.

Deana Tillotson | Executive Vice President and General Counsel | InterBank

However, with growth comes scrutiny. Banking is a highly regulated industry at state and federal levels and managing risk is crucial to ensuring regulatory compliance and proper growth, Tillotson says.

She’s also somewhat atypical in that she serves on the boards for  InterBank and its holding company, Olney Bancshares of Texas Inc. While it’s common for general counsels to be secretaries of the boards of their organizations, she says having a seat on those boards demonstrates the ownership’s confidence in her business acumen.

“I enjoy helping ownership and executive management feel confident in the risk management structure so they can move the business forward,” Tillotson says. “It’s what I’ve done here—I was challenged to create the structure to grow.”

From 10 to one

InterBank’s more than 40 locations in Texas and Oklahoma are the result of more than 35 years of acquisitions that began in 1987 when Olney Bancshares bought the First National Bank of Olney in Olney, Texas.

More bank acquisitions followed across the plains and Texas Panhandle and then across the Red River in 2005 when Olney Bancshares acquired its first group of banks in Oklahoma. From 2006 through 2008, the holding company acquired banking locations in the Sooner State, including five in the Oklahoma City area.

With the banks, the company was also acquiring bank charters—the license for operations required by states and the U.S. Federal Reserve. So, in 2010, Olney Bancshares consolidated the 10 banks and 30 locations into what’s now called InterBank.

Though Tillotson joined InterBank after its leaders had gained regulatory approval for merging the banks under one charter, she helped lead the bank through the process.

She says consolidating, integrating and developing the various corporate departments took about two years. It included creating the in-house legal department as well as implementing the structure for new corporate governance procedures.

She also helped develop a vendor management program, and integrated systems and operations for the deposit and lending operations as well as expanded the internal audit and credit analysis functions.

The acquisitions continued, too. InterBank acquired five bank locations in north Texas in 2013. In 2014, it acquired Park Cities Bank and its four locations in Dallas and Fort Worth. A year later, it acquired three more banks and multiple branch locations in the Dallas – Fort Worth Metroplex, and Tillotson began focusing on integrating the acquisitions.

She says InterBank could reach $5 billion in assets through growing its loan portfolio or more M&A, and she’s employing enterprise risk management strategies to prepare for that potential growth.

“Enterprise risk management is not unique to banking, but it is heavily weighted in our industry,” she says.

Risk management for all

To manage risk and ensure compliant growth, she’s worked with internal and external audit teams to review InterBank’s operations to prepare for regulatory exams by state banking commissions and federal agencies such as the Federal Reserve Board, Federal Home Loan Bank and the Federal Deposit Insurance Corp. She also helps ensure the lending portfolio is sound as it’s a major part of the asset structure. She says department leaders are routinely asked to assess and document the risk factors and environment they face.

Tillotson has also helped create succession plans for InterBank’s leadership and manages the insurance portfolio that covers bank operations. She says these tasks can’t just be outsourced because it requires understanding the unique risks the bank faces and the best ways to mitigate or cover such risks.

“If you want to get bigger, you have to show regulators you’re ready, because expansion requires regulatory approval,” Tillotson says.

The consequences for not managing risks extend beyond regulatory compliance, she adds. There’s also the human factor in protecting InterBank’s customers and the potential for reputational harm.

InterBank is also working through changes in how its customers do their banking. Even in branches in small towns, customers are banking more online, so Tillotson works with the IT and compliance teams to ensure systems are secure and privacy is protected while still providing a good experience for online users.

InterBank has also provided Tillotson the chance to build a legal and risk team—now at seven people.

“My vision for the department has evolved over the years. As staff changes occur, I reorganize responsibilities to play to strengths of great lawyers, paralegals and risk managers,” she says.

Achieving balance

Tillotson hails from Throckmorton, Texas, a town of about 800 people west of Fort Worth.

After earning her bachelor’s degree from Texas Tech University in 1996, she continued on to the University of Houston Law Center, earning her J.D. in 2000. After graduating, she joined the law firm of Bracewell & Patterson LLP in Houston as a litigator.

In her first in-house role, Tillotson was associate general counsel for Group 1 Automotive, one of the largest auto dealership groups in the U.S., from 2006 to 2008.

She then became a partner at Bracewell LLP before getting a call from the majority shareholder of Olney Bancshares, seeking her help in managing the merger of the banks. Guiding growth since then has been rewarding, but not without its challenges.

“There is a natural tension between the legal department and commercial side of any business,” Tillotson says. “I work hard to balance being the guardian of corporate governance that protects the bank with helping our commercial interests succeed.”

View this feature in the Vanguard Spring III 2023 Edition here.