All in the Family
Three generations of finance experts help Fort Worth-based
Contract Bond Agency build strength
Born and raised in Fort Worth, Texas, Fred Thetford, a co-founding partner at Contract Bond Agency (CBA), is a straight shooter. Ask him about surety bonds, and he’s sure to lay it all out in layman’s terms; and he’s confident in his ability to get the job done.
“If you want to be bonded, someone to help you grow your business, you need to call us,” he quips.
The 75-year-old has spent the last 50 years handling the financial needs of businesses. Armed with more than 20 years’ experience in commercial banking, he and co-founding partner Tom Young created CBA in 1991 to provide contract payment and performance bonds to local construction contractors. The agency, based in Fort Worth, began offering commercial insurance in 2012. Clients are primarily from Texas, Louisiana, Oklahoma and New Mexico. CBA continues to support clients when they perform construction jobs in other states.
With extensive backgrounds in credit underwriting and financial services, Thetford and Young know how to analyze financial statements, evaluate risk and work with construction contractors. They understand that industry from a financial standpoint.
“It was just a natural evolution for us,” Thetford says. “Because of our experience in commercial banking, we just dovetailed into the contract bond business with ease.”
In addition to their years of experience, they believe that paying careful attention to details, providing timely responses, offering “value-added” services, and approaching their clients with a dedication to service are the factors that set them apart from similar businesses.
Young says, “We wanted to build an agency specializing in contract surety and insurance that represented a dependable source for both. We wanted to develop a reputation as knowledgeable surety professionals who work hard to deserve our clients’ business. That attitude has paid off.”
A Special Kind of Fraternity
There aren’t a lot of bonding agents out there, Thetford asserts, and it’s for a good reason. It’s an extremely sophisticated business that he says most people in the insurance industry don’t truly understand. Thetford and Young make it seem easy, as they are able to boil things down to what matters.
Simply put, CBA is a credit facility and insurance agency regulated by the Texas Dept. of Insurance, which helps contractors maximize their abilities to bond public and private projects and mitigate risks with proper insurance coverage. Ensuring that a project is properly bonded protects taxpayers’ money and guaranteeing proper insurance coverage protects the client.
The process starts with a financial analysis. Qualified applicants have the technical and financial capacity to undertake specific projects, as well as the ability to manage cash flow to pay the costs and see the project through to completion. A company’s equity, liquidity, experience and management capability all play a part in deciding whether a contractor will be approved.
“It’s not like buying insurance,” Thetford says. “It’s totally different. Surety bonding is much like banking. It’s similar to going to the bank to borrow money—either you qualify or you don’t.”
He knows surety well enough to point to its origins. Thetford notes that while surety bonds have been used in the United States since the formation of the nation, they’ve been around since ancient times.
“You can go through the Old and New Testaments of the Bible and read that suretyship was used in those days,” he says matter-of-factly.
It’s a Family Affair
Thetford and Young are both passing along their knowledge about the business to their offspring.
Today, CBA is represented by three generations who work side by side. The company employs Thetford’s son, Trey, grandson, Quade, as well as Young’s son, Jared. Trey and Jared—with nine years of experience each—are involved in surety and insurance. Quade recently attained his insurance license and is being trained in the field.
Young and Thetford also consider the entire team as family, including insurance and surety veterans Tobin Tucker, with more than 30 years’ experience, and Diane Brown, a 15-year Administrative Assistant. Collectively, the team brings 165 years of experience in providing financial and insurance services.
“We can trust our family of employees to run this company if something happens to Tom or me,” Thetford says. “If you’ve got a good family team you believe in and you trust, you know the company is in good hands.”
He adds, “It’s not all about Tom and me. It’s more about the succeeding generations. They know what we can do and they how we are going to do it. They have to meet us halfway. We will one day hand that baton off to Trey, Quade and Jared, and we feel pretty confident about that. They enjoy what they are doing, and know and understand the business. We like what they’re doing and have confidence in them. Our clients will be in good hands.”
Young and Thetford also believe the family dynamic at CBA helps keep the team motivated and strengthens the feeling of trust from clients.
“By employing our sons, and now Fred’s grandson, this should provide our market with a feeling of stability and continuity,” Young says. “We want our present and future clients to know that we will be here working for them far into the foreseeable future.”
Building Relationships
Thetford says CBA excels because of its personnel’s vast financial backgrounds. It also maintains relationships with several companies that consider bonding for various types of construction businesses. Bonding by these companies covers projects of $1,000 to $100 million in total project costs.
“We are proud to offer bonding and insurance to virtually all construction companies—big or small,” says Young.
Thetford adds, “The biggest challenge in the surety and insurance business is getting in front of the potential prospects. They are very busy people and typically have a lot of things to do other than talking to an insurance guy. However, when we do have the opportunity to present what we can do for a client, we most likely will have a client for the long term. It’s a very relationship-oriented business. You’ve got to trust them and they’ve got to trust you.”
CBA has contracted with sureties that have an “A” or better A.M. Best rating (a rating system based on the financial stability of insurers and insurance-linked securities and structures), as well as those that are accepted to be bonded by state and local entities, and the federal government.
Young says his team wants to continue building on its reputation as a go-to source for construction contractors who need bonding and insurance as well as occasional financing for real estate and equipment.
“We know methods that can help our clients obtain the highest bonding limits and banking lines of credit,” Young says. “We also offer other services unique to insurance agencies—for example, financing sources for clients’ real estate and equipment needs.”
CBA team members also have a unique perspective in assisting clients with what they call “balance sheet management,” conducting business so that financial presentation maximizes bonding and line-of-credit capacity.
CBA personnel recognizes that some contractors, such as utility and road contractors, must make substantial investments in equipment. As debt is a necessity for such contractors, CBA aligns with equipment finance companies to assist with funding without disturbing the client’s working capital line of credit.
Thetford says they relish building a rapport with small contractors as much as with the multimillion-dollar accounts.
“We’re very pleased with the quality of the accounts that we have,” he says. “I’m not into the numbers. It’s the service. We’re proud of every contractor client on our books because we’d like to think we are a part of their past successes and future growth.”