Illustration by: Doug Ross
Across the country Americans still widely affirm the enduring community bank business model
By Ed Avis
he Triad region of North Carolina, like other banking markets across the country, is loaded with competitors of all sizes. It’s there where upstart Bank of Oak Ridge has twice taken the equivalent of a gold medal—it was voted “Best Bank in the Triad” by readers of YES! Weekly in 2012 and 2013.
“The competition here has been furious,” points out Ron Black, president and CEO of Bank of Oak Ridge. “People receive attention when they come to see us. We take the time to listen, and we try to determine what services or products will really move them forward toward reaching their goals.”
Through its winning community-wide recognition and appreciation, Bank of Oak Ridge, a $350 million-asset community bank headquartered in Oak Ridge, N.C., with four locations in Greensboro, Oak Ridge and Summerfield, exemplifies the strong ongoing demand for local, relationship-based community banks throughout the country. As the annual celebration of Community Banking Month will once again highlight this month, our industry’s longstanding attributes of superior customer service, local can-do decision making, and much-needed products and services remain an enduring combination that American financial consumers still avidly recognize and support.
Every day community banks like Bank of Oak Ridge, along with hundreds of others annually recognized by local resident opinion polls, still prove the overwhelming success and importance of the community banking business model. Examples abound throughout the country. This story profiles just a few.
Telling their story
In northwest suburban Chicago, Home State Bank wins the top banking awards in the “Best of the Fox” readers’ contest conducted by the Northwest Herald so often that other banks have complained to the newspaper, says Steve Slack, president and CEO.
Slack says there’s no secret to Home State Bank’s winning ways: He and many others at the $600 million-asset community bank are true, deeply committed members of the local community. “I do not go a week where somebody doesn’t see me at my son’s basketball game, or sends me a letter or email, and says, ‘Hey, I had a great experience at Home State.’”
Home State Bank, which operates seven branches, will celebrate its 100th year in business in 2015. There, all lending decisions are made locally, and its board of directors is comprised almost entirely of local leaders. That local focus, knowledge and longevity have paid off admirably in customer loyalty. Some customers, including local businesses, have been customers for five or six decades, Slack says.
But Home State Bank isn’t cruising on its past accomplishments. Last year the community bank began an advertising campaign to help further separate itself from other banks competing in its market area that are headquartered elsewhere. The campaign features six different ads, each of which emphasizes an important characteristic of a community bank: integrity, proximity, accountability, longevity, community and stability. The ads, which run on Mondays in the local Northwest Herald newspaper, also feature photos of different long-time employees.
“People mention the ads to me all the time when they see my picture,” Slack notes.
Service stands out
Some banks take pride in offering every possible service, but that’s not how Edison National Bank in Ft. Myers, Fla., operates. Instead, the $240 million-asset, four-branch community bank recognizes what it does well and recommends other banks or service providers when those could serve a customer better.
“We sit down and listen to our customers’ needs and learn what they’re looking for,” says Robbie Roepstorff, Edison National’s president. “And if they need things like accounts receivable financing, which is not really our forte, we say Bank of America does that well. They appreciate our candor.”
So how does Edison National separate itself from its competition?
Roepstorff makes sure that the bank’s customers know its decisions are made locally and that the bank is in business for the long haul. That concept began when Robbie and her husband, Geoffrey Roepstorff, the bank’s CEO, started Edison National in 1997. “We were seeing all these bank mergers and buyouts, and that happened to the bank we were at,” she remembers. “So Jeff and I approached a couple of the directors and they were right on board: They wanted a long-term community bank.”
That local angle has paid off. Bank of the Islands, which is the name of the two Edison National branches located on Florida’s Sanibel and Captiva islands, has been named “Best Island Bank” by readers of Sanibel-Captiva Islander every year for the past 15 years.
Edison National is only 17 years old, but after various mergers and closures of other banks in its marketplace, it stands as the oldest local bank in the community. The bank emphasizes that fact in its advertising and promotions, which use taglines such as “Still Standing Strong.”
“We just show stability,” Roepstorff says.
Like other community banks nationwide, Bank of Oak Ridge stays connected to its North Carolina community through a wide range of ongoing philanthropic endeavors responding to real local needs. Examples include partnering with the Alight Foundation, which supports local breast cancer patients and their families, and its annual Christmas for Kids event, which benefits children involved with the Big Brothers and Big Sisters of Greater Greensboro. But it’s also the everyday interactions with its customers that allow the community bank to stay connected and that also drive the bank’s highly successful business relationships, says Black, the bank’s president
“If you walk into a bank or any business, what are your expectations? You want to be acknowledged. You want people to value your being there,” he says.
Elaine Jones, co-owner of Alterations Express Inc., a clothing alteration business in Greensboro, N.C., attests to the quality of her business dealings with Bank of Oak Ridge. “They take time to explain things to me and look me in the eye and don’t rush me out,” says Jones, who has been a customer since the early 2000s. “It’s just so nice to have someone treat you like a person.”
Using the tagline “Banking As It Should Be,” Bank of Oak Ridge, which was founded in 2000, has set itself apart from the state’s high concentration of megabank outlets by addressing local needs better than any other local financial institution, Black says. A good example occurred during the height of the recent recession. The local real estate market had tanked, and several residential construction clients of the bank had unsold houses on the market that were not moving.
In response, Black established a special financing program to help those builders manage the downturn and eventually sell those properties. The financing arrangements included loans at relatively low rates and no interest for the first year. Bank of Oak Ridge also advertised the homes for sale on its website, and helped make sure the lawns were well kept and generally looked presentable to buyers.
“We were able to sell almost all of those homes, about 30 of them, in around two years,” Black recalls.
Quinnipiac Bank & Trust Co. in Hampden, Conn., is only six years old, but the community bank makes various loans and offers a variety of traditional products and services that some of its competitors have stopped providing. “We’re doing the typical products that every bank used to do,” explains Mark Candido, the bank’s president. “We do letters of credit, loans for expansion, SBA loans … restaurant loans, gas station loans, car dealerships.”
That range of loans and products sometimes leads to an interesting dynamic: competing big banks recommending little Quinnipiac Bank to their customers, Candido says. “We’ve got three or four large banks around here, and our friends there, the VPs of lending, will call and say, ‘I’ve had this customer for 25 years and the powers that be have decided we don’t want to be in this line anymore.’ We end up getting those customers.”
Quinnipiac Bank, which has one location and $100 million in assets, was voted “Best Community Bank in New Haven County” in 2013 by readers of New Haven Living magazine. Candido attributes the widespread recognition to the fact that Quinnipiac Bank is truly locally operated. Its decisions are made locally by someone customers can talk to directly. Its management and other employees live in town, and its board is made up of respected local leaders.
“No matter where I go I know somebody,” Candido says. “It hit me one day when I went out to dinner with my family and people kept stopping me. By the time I got to our table my sons said, ‘Dad, can we go somewhere people don’t know you?’”
That deep local involvement means the service at Quinnipiac Bank is highly responsive and personal. Candido says meetings with potential customers frequently begin with friendly talk about the relationships and connections with friends and acquaintances he and the customer share.
Nevertheless, Candido says Quinnipiac Bank communicates its close ties to the community and its residents every way it can. “You can’t rest on your merits. We do billboards, advertising, handshaking, and we attend every function we can stretch ourselves to.”
Ed Avis is a writer in Illinois.