This week on the podcast Matt sits down with Arkansas Business Hall of Fame Inductee Curt Bradbury, Chief Operating Officer of Stephens, Inc. Curt begins the episode by walking through the beginning of his career working with Jack Stephens and how he was given the opportunity to turn around a struggling bank at the age of 35. Based upon that experience, Curt highlights the importance of change management and he walks through how he was able to turn around a struggling Worthen Bank and lead it to to an acquisition and eventual merger into Bank of America. He then discusses the history of Stephens Inc., his background in economics and history and his views on the ethical underpinning of capitalism.

What one does for a living is part of one's

personal fulfillment. A very smart and successful businessman

I knew from New Orleans once told me, you got to show up.

Excellence, professionalism, innovation and

collegiality. These are the values the Sam M. Walton College

of Business explores in education, business and the

lives of people we meet every day. I'm Matt Waller, Dean of

the Walton College and welcome to the be epic podcast. I have

with me today. Curt Bradbury, Chief Operating Officer of

Stephens Inc. He's also a director of Stephens Inc. Curt

is an alum of the Walton College he got his undergraduate degree

in finance here, and a master's in economics. But most

importantly, and congratulations Curt, on being inducted into the

Arkansas Business Hall of Fame. Curt will be at our event, our

big annual event in Little Rock in February to be inducted into

the Arkansas Business Hall of Fame, which is quite a

remarkable group of people to join. We started this in 1999

and but people that are inducted into this include people like

William Dillard, Jack Stephens, Sam Walton, Joe Ford, Don Tyson,

JB Hunt, many, many amazing leaders. And of course, fairly

recently, 2019, we had Warren Stephens inducted, and it just

occurred to me, Curt, you may be this Stephens may have more

people in the Arkansas Business Hall of Fame than any company

because Jack Stephens Warren Stephens and now you?

Well, that's quite an honor for our firm. If

that's, that's correct. And it is in any event, if

I think it is, I think that's right. And it is

it's it's a great group, and congratulations on on that

induction, and to your tremendous accomplishments in

business.

Thank you, Matt. You've been you've been a

supporter of mine for a long time now and I've been a

supporter of yours.

Yes.

Quite a while now. And it's been a pleasure to

work with you and, and certainly I look forward to working

through all the all the Arkansas Business Hall of Fame

preparation with you.

Well, you know, Curt, you are a man who really

notes and celebrates the accomplishments of mankind in

business. Because it's a great way to advance society, business

advances society, in so many ways. And I know in your career,

one of the, you know, you've done a number of things that

have really elevated your stature in business, but I'd

love to hear, of course, I'm familiar with the Worthen story.

We could talk about that. But you were a young man, when all

of a sudden you were plopped in the middle of Worthen Bank and

asked to lead it. Would you mind talking a little bit about that?

You know, the preface to all that really, is

that that happened, all that happened when I've been with

Stephens for 13 years, now, 50. And I had worked closely with

Jack Stephens, who was ahead of his time on many, many issues

with respect to investments particularly and he felt that

there was a at that time there was a interstate banking

prohibition. In other words, banks couldn't operate across

state lines, and he felt like that would ultimately be

repealed. And at that time, you know, let's say the early 70s,

it was that was a heresy, almost to say that bank could operate

across state lines. So he began taking 4.9% positions in a

variety of regional banks throughout the south and

southeast, basically. And people would ask him what his theory

was about owning these banks. And he would say, well, you

know, the McFadden Act, which restricted interstate banking

would have to be repealed at some point. And I don't know

what's going to happen, he would say, but at least when that

happens, our friends will know each other meaning the CEOs of

all these banks, and he thought that that would be a good thing.

So he when I haf first started here, he needed somebody to help

him monitor the financial data in those banks and their

performance and colleagues in the corporate finance

department, when I first came in thought that sounded a little, a

little bit like grunt work. And so it felt to me the newest, the

newest guy, and probably in 73, or 74. And so I began to work

with Jack on his investments in all these banks. And you know,

there was some really, there was some stars in that cadre of

banks that we, that we had investments in he will call it a

North Carolina National Bank now, Bank of America, and Hootie

Johnson at Bankers Trust of South Carolina, several of the

better performers in Texas, Union Planners in Memphis, great

bankers running a lot of these banks. So actually, at a very

young age, I got to know a lot of these bankers so and got to

watch them operate and run their bank. So when Worthen had its

problems, and Jack and and Stephens family owned 15% of it.

And it was a passive investment. And when when it had trouble. He

naturally in the family was naturally solicited to

recapitalize it because of the financial strength and their

prior interest in it. And basically, he said that he

would, but part of the deal would be that I would go to

Worthen as an officer, and that happened basically overnight.

And I was I went home and told my wife, who knew nothing about

what I was getting ready to do, you know, that I left Stephens

and gone to Worthen. And so I think people were surprised

about the choice. But but in fact, I had worked with Jack on

on banks and banking for a long time, I knew how he felt about

the management of the banks, I knew philosophies of his about,

about the banking business. And so it was sort of a natural, a

natural reaction for him to want me to be involved in the Worthen

situation.

Turning around a bank like that, or any

organization is very difficult.

Yeah, it is.

And how old were you at the time?

I was 35 the day I walked in there.

Yeah. So that's, that's a lot of responsibility

for turn turnaround at the age of 35. How did you think about

managing that turnaround, leading that turnaround?

Well, with all due respect to everybody

involved on the other side, it was clear to me that the bank

needed a fairly radical change in its culture and many banks at

that time did, for example, the cost structure of the bank was

way too high. And, and that, you know, that was more of a

cultural thing than it was a failure of operations, it was

just an attitude. And so one of the first things we began to do

was cut costs. And, of course, we had the capital issues, from

the huge and sort of precipitous loss of capital. And we had to

start about raising capital to put the balance sheet back in

shape and, and then we had to change the culture on lending.

And so I think, to me, it was, and again, as I say, all due

respect to the people were there at the time, I just came in with

a different point of view. And so the, I think, the most

difficult thing is to persist in that point of view, change is

difficult, people, people resist change. When you know, big data

side, they really know that they really shouldn't resist it and,

and, but the change is difficult to manage. And, and so, you

know, I was insisting on a change in the culture and it was

a it, I must say, to do that it takes a good bit of stubbornness

on on the change agents part. Because what happens is the

resistance says, they basically takes the form of, well, you're

wrong about this. And in my case, and you don't know

anything about banking, and the, in the, the response to that is,

well, I might be wrong. But we got to do this, and we're gonna

do this and and my wife thinks that it required stubbornness

that I was quite well suited to, to see all that through and and

apply that. But I think it just you got to lay out, you got to

understand there'll be resistance to change, except

that you've got to lay out a plan, a change in culture, and

then be stubborn about implementing it. And after a

while, you get a few cultural successes under your belt, then

people begin to believe and that's one of the things that

happened at Worthen is we had a great 10 year run really after,

after 85 when the problems started. But it required laying

out a plan stubbornly implementing the plan. And

convincing people that change was good.

Well, you and you were wildly successful in this

change that you implemented, and the performance. Would you mind

sharing a little bit about the results?

Well, we, you know, the there was tremendous

losses, right at right at first, and we actually turned the

losses around, in about it took about three or four years to

turn the losses around into profits. And I, you know, I was

not overly concerned about the fact that it was taking three or

four years. I know, probably, there were others, and

shareholders that were concerned about that. But we had, we had a

good bit of credit losses to absorb. And it took the earnings

of the cash flow of those three or four years, we're making

money, but but then writing the loans off, and, and net income,

then being zero, it took three or four years to absorb those

losses through the earnings that we make. But the way I, as you

know, I'm a capitalist and the way, the way I like to describe

the success is the stock had been the worthless, it was a

publicly traded stock on the old American Stock Exchange, the

stock had been in the 30s and 20s and 30s for a while. And

then when the problems happened, it went to four and there was a

recapitalisation stock offering it around four. And so so that

was in 85. So then in as we rebuilt, the earnings and, and

the expanded, actually began to make acquisitions in the, in the

bank, as we did that the stock went back up into the 20s. And

then and then, when the banking industry was in a consolidation

at the time, big banks were buying small banks, and we we

were approached by several of those banks. And the one that

actually won the, the flirting contest was Boatmen's Bank of

St. Louis, St. Louis, and that trade happened at 30, 33 or 35

maybe. So it was from four to 35 when that trade happened, and

then in two years time, the Nation's Bank, North Carolina

National in the nation's bank, was it become Bank of America

bought Boatmen's and then they paid 50 but in translating to

owe more than stock they paid 55 for Boatmen so that stock had

gone from 40 to 55. And then if you held your nation's bank Bank

America stock it went, it doubled from 55 so basically it

was a four to 100 sort of trip. If you held your your Bank of

America stock through to the end.

What a what a journey. That is.

Congratulations. That's amazing. Now, you've been Chief Operating

Officer of Stephens since 1995, I believe.

That's right.

And that's a long time. 28 years to be running.

Set. And of course, Stephens has changed so much over the years

and grown so much. But, you know, and for those listening, I

mean, I think we all know Stephens is involved in

investment banking, and wealth management, there's so many

things that Stephens does now research, sales and trading,

public finance, insurance, private capital, family office

services, and, and of course, it's a, it's a global company

now. So you've seen a lot of change over the past 28 years,

and in your position as Chief Operating Officer, I mean, it

must just be a constant, constant battle to keep up with

all of this growth and expansion.

Well, we have a great team. You know, the, there

is a tremendous organization here that that manages all those

different businesses. You mentioned at the outset, Jack

and Warren. And what and Witt Stephens, who was Jack's brother

said before, if I've been successful at all, it's because

I've stood on the shoulders of those giants that created a hell

of a base level company here. And of course, companies have

transitions and they have growth. And there was a

transition. When Jack Stevens joined Witt after he got out

after Jack got out of the Naval Academy. There was a transition

when Warren became CEO of the company in 1989. And, and Warren

has built from 1989, to continue to build the base. Things were

different for Jack, you know, Jack, at one approach was

looking at things and the company was in an in a way in

its infancy in and when Jack came in, and, and Jack expanded

it from the bond business into a lot of other things. And Warren

continued that expansion. And soon Warren's kids already work

here. And that I see that as sort of another transition. But

yeah, it's under Warren's leadership since 89. It's grown

tremendously. It's it's diverse. It has a great reputation, in

business everywhere, of competence and integrity. And

so, and it has a great organization. And so we have

great people working here. And it's a pleasure to work with

them and give them a challenge. They accepted and accomplish it.

I remember, several years ago, I'd already met you,

but it was the first time I'd heard you lecture. And so

although for those listening, I mean, we all know you're a

successful business person. But most listeners wouldn't know

that you have a scholarly side to you, necessarily. And I know

the first time we had I think it may have been it was the first

time I saw you speak to our students. I think we had were in

an auditorium that had about 300 students. And you were talking

about economics and capitalism. But I remember the thing that

struck me and I don't remember the particular authors you read,

but I believe it was Hyack and John Locke and Basquiat and some

others, and you you pulled out books, and you would read a

quote from the book or maybe your notes. And again, this is

going back several years. But you you you made a an argument,

a lecture around capitalism and economics that I thought it was

absolutely phenomenal. But most business people that I have met,

even if they're familiar with economics wouldn't have it.

experience reading some of these tremendous authors.

Well, of course, I started writing them. You

What a great name for economics

mentioned I have a master's degree in economics from from

Interesting thing about Dr. Markets. Philosophy is

University of Arkansas. I started reading those guys when

I was there. That's one of my favorite courses and getting a

master's degree of history was his history of economic thought,

he was a market oriented capitalist. And so, but any

thought the old Professor Don Market, who's gone now, but

rate, I have thought, a lot. I have thought a lot over the

years about the moral and ethical underpinning of

capitalism, which I think exists in which I think is substantial.

I actually worked out in my own mind and heart that that

premise, over the years, and I'm obviously disturbed now to see

capitalism, under fire for being a heartless system for being for

being somehow now we've got over 50% of the students or young

people in the country think it's a corrupt system or something

like that. And the fact of the matter, I think is, is that it

is the most moral and ethical system of economic organization

that that exists. Because it's based on freedom, because it's

based on personal freedom, and one of the myths about

capitalism. And, you know, Matt, we've talked about this live,

and I want to myths about capitalism, I feel is that the

myth is that it's about money, and greed and wealth. And the

fact is, it's not, that's not what it's about, it's about

human achievement, it is a system that permits and

encourages human achievement, with with more direct freedom to

accomplish that than any other system that you can, that you

can think of so, so when you think about the moral and

ethical framework, then you have to say, which system provides

the most autonomy for each individual, to affect his or her

own creativity? And yes, to be rewarded for that, and, and, you

know, to make money, and that all that all has a way of

working out, in my opinion, than coercive systems as well, like

socialism. There's much more coercion coercion involved, the

state is the boss. And my, I'm just distraught really at how,

what a great, tremendous misunderstanding there is, of

the ethical underpinnings of capitalism as we discuss it

today. And, and the myths that are promoted about it. In

arguing for the, for the, for the opposite. But, you know, one

of the things about capitalism that I think is it people miss

too is there's a referendum vote that goes on every day, in in

the world, in the in commerce. And that's the price system. So

the price system is a referendum vote of everybody in the world

making minut little decisions about what they want to do with

their own the product of their own human achievement. And that

referendum vote needs to be permitted. It doesn't need to

you don't need to be coerced into what, how you vote with,

with the fruits of your labor in a market system, the market

needs to work. And so referendum votes are the very description

of freedom. personal autonomy, which is maximized under a

capitalistic free enterprise system, is the very essence of

freedom. What could be more? What could be more important

than personal autonomy? And so I just, you know, when I listen to

on TV, and I hear arguments that that are thinly disguised,

socialistic arguments, communistic arguments. It just

is so disturbing to see that, you know, it's like, in my you

know, and I know the other side feels the other way. And I got

it. But but it's like, I think that this is the most moral and

ethical system there is. And the other side thinks it's the most

corrupt. And that's where we are today. But whatever the case, I

tell my kids is for them to work out. At my age, and, but but

it's, it's very disturbing, because I worked it out for

myself in my own heart a long time ago.

Yeah, I think you're right. A lot of people

don't think through these ideas carefully. And they kind of go

along with what sounds or feels good.

Yeah, yeah. And it's always, you know, one of

the things one of the things about what sounds or feels good

is that, you know, I, my brother's keeper, do the other

do I help the other? Well of course, of course, there's

nothing in the capitalistic free enterprise system that says, you

don't do that. I mean, Milton Friedman, you know, one of the

godfathers of capitalism, free markets and whatnot, said, of

course, there's there's there's charitable impulses in in people

that seek to be to achieve and be rewarded for their

achievements. Of course, there is and of course, there's room

for a safety net. Of course there is, nobody says there

isn't, even Friedman said that. So, I think that we, I don't

know, I don't know how to have that debate in a more in a

fairer framework than we're having it right now. Because I

think both sides get distorted tremendously. By the way, one of

the, one of the authors that you'll recall that I quoted in

those lectures that I gave was Emerson, Roy Emerson. And, of

course, he, he wrote extensively about self reliance titled A

visit book of his essays. And I wish I wish it were required

reading, I know, and it would suit me that if Karl Marx were

required reading, you know, I think it should be but but

Emerson wrote about self reliance. And, and it's one

step, you know, he was in the mid 1800s. And, you know, you

know, the, yes, people living and writing about capitalism,

then but it's certainly much, much more developed economic

system now, than was then. But he saw that what, what was

necessary for growth, and for widespread prosperity for each

person, to be self reliant, and to be autonomous unto

themselves. And, and he's, he's he saw that and wrote about it

early and it was as if he were writing about in writing about

self reliance, he was writing about a free market economy.

On behalf of the Sam M. Walton College of

Business, I want to thank everyone for spending time with

us for another engaging conversation. You can subscribe

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