Revealed: Independent Banker’s most innovative community banks

Innovation takes many forms. It doesn’t have to be about technology—although it often is. It could be a product. It could be a management philosophy. It could even be your recycling bins. What counts is that it solves a problem, meets a need or just makes your community a better place. When we asked you to nominate community banks that think differently, you delivered. We loved learning about all the great things you’re doing—but we had to pick just 20 community banks to recognize.

First Community Bank and Trust

Beecher, Ill.
Assets: $145 million

Cross-promotion for the win-win

Early this year, 102-year-old First Community Bank and Trust began a new marketing approach: It expanded both its community content and social media channels to increase customer engagement. Today, the community bank’s Facebook page is touting its newly designed website, along with promoting the Chamber of Commerce’s garage sale. When one post for a high school blood drive got 1,400 views in the small town of Beecher, Ill., CEO Greg Ohlendorf thought the fresh combination was on the right track.

“We’ve always cross-promoted for community groups who lack resources, but in the social media space, it made sense to share content from our friends along with our own content,” he says. “It reflects our place in the community as more than just a financial institution.”

Ohlendorf says First Community Bank and Trust first used Facebook and then expanded to Twitter and LinkedIn. “Now, we have a calendar of community events and our own messages to blend together,” he says. “We’ve found the spread we get is really strong, especially in the content that isn’t bank content.

“The mix is making a real impact in the number of folks who are interacting with us.”

—Susan Thomas Springer

Kevin Yepsen, Photo: Andrea Godfrey

Solar powers

Community State Bank is on fire in its efforts to introduce solar power not only to its own facilities, but also to the community at large.

Community State Bank

Galva, Ill.
Assets: $220 million

A few years ago, bank president and CEO Kevin Yepsen went in with a couple of friends to purchase a rural property with a pond but no power. “The utility company told us we were $17,000 away from getting power, so I started looking into solar,” he says. The concept was not foreign to him. His father is a retired electrician.

Since that time, Yepsen has expanded his passion, installing solar panels on three of Community State Bank’s five offices, and working to introduce solar to local homeowners and school districts.

While his mission has been good for the community as a whole, it has also been good for the bank’s reputation as a community leader. Yepsen is now considered the go-to expert for anyone in the region interested in exploring solar options.

By the numbers

3 of 5
Community State Bank branches that have solar power

Percentage of total power these branches get from solar

Energy savings these branches have achieved using solar power

Individual property owners in the area committed to using solar power with the bank’s encouragement

2.4 megawatts
Estimated power that these 155 installations will generate

$2.5 million
Estimated savings on energy costs for these 155 properties over the next 12 years

—William Atkinson

Creating a seamless customer experience

(and asking customers to share it)

Drew Sandholm, vice president of marketing at Quontic Bank, offers his perspectives on winning customers and keeping them loyal.
“Digital is the great equalizer. We don’t have the scale of physical locations, but we can have the best digital product. You have to be looking for ways in which you can compete, add value, make banking easy and make the mortgage process hassle-free.

Quontic Bank

Astoria, N.Y.
Assets: $365 million

“We’ll soon offer Zelle, which will allow us to benefit from a huge brand. More people are becoming familiar with Zelle through its massive ad buys, and we benefit from that when we talk about our bank. There’s great convenience through Zelle, as well as being able to offer a digital product that you find at the biggest banks in the country.

“It’s really important that community banks are asking for reviews. Most people decide where to spend their money, but also where to put their money, based on reviews. So, they’ll look you up. They’ll see what other people are saying about you. At Quontic Bank, we are creating a culture of celebration whenever we have a five-star review. Banks don’t want to miss the boat on that. Community banks are doing really great work, and it’s important the world knows about it.”

—Colleen Morrison

Super security

Super ID protects against identity fraud.

North American Banking

Roseville, Minn.
Assets: $500 million

North American Banking Company’s Super ID, developed by Tascet, protects customers from identity fraud by using cameras and fingerprint scanners. The bank collects an individual account signatory’s name, address, date of birth, country of birth and gender, along with a “faceproof” and two “fingerproofs.” The bank then uses the digital proofs to confirm the customer’s identity anytime they want to access their account or conduct a transaction.

—Beth Mattson-Teig

Read about the ExCheq p2p app, another North American Banking Company innovation, in the May 2018 issue of Independent Banker.

Diving into data for stellar results

Robert Stillwell

Seacoast Bank is using big data and analytics to level the playing field with some of its bigger national bank competitors.

Seacoast Bank

Stuart, Fla.
Assets: $6 billion

The Florida community bank implemented its Customer Lifetime Value (CLTV) data analytics program in early 2016. The CLTV program provides insights that the bank uses to enhance its strategic decision-making, such as creating more targeted marketing campaigns or optimizing its branch network. The bank shares those insights with its frontline associates to help them strengthen customer relationships.

“We want to be the main bank that our customers bank with. We don’t want to be their secondary bank,” says Robert Stillwell, senior vice president and chief analytics officer at Seacoast Bank.

The CLTV program allows bankers to look at transaction history, products and services that a customer is using—or not using.

For example, it can flag accounts that are not very active. That may create an opportunity for a banker to explain unexplored features of the existing account or switch the customer to a different account that might better fit their needs.

One of the common hurdles for community banks to implement big data and analytics systems is cost. Seacoast has partnered with providers FIS and SAS to use an off-the-shelf solution. The program uses an advanced analytics software from SAS that applies machine learning and predictive modeling, and combines it with data the community bank gathers from its FIS core banking platform.

“We do believe that any community bank or financial institution can afford those tools,” says Stillwell. The bigger challenge is that many organizations don’t have the expertise to develop a sophisticated data and analytics program, he says. One of the keys to success for Seacoast was hiring people who had experience working with industry leaders, such as American Express and Capital One.

Seacoast’s innovative use of analytics recently earned it an FIS Impact award in the Banking: Community Bank category. It was one of only 10 financial service industry organizations globally to be recognized.

—Beth Mattson-Teig

Foundations for lasting relationships

Springs Valley Bank & Trust Company

French Lick, Ind.
Assets: $375 million

After a billionaire rolled into French Lick, Ind., (population 1,769) and spent $450 million renovating the once-luxurious French Lick Resort, a problem emerged: a lack of housing for employees the resort needed to attract (and keep).

“There are well over 500 people working there, and they’re adding another 200 in the next 12 to 18 months,” explains Jamie Shinabarger, president and CEO of Springs Valley Bank & Trust Company. “We met with a Realtor who said that five years ago, there were 180 homes for sale, but now there are only about 60.”

The resort knew team members wanted to live locally but could not find the right housing. It also wanted employees to live locally, rather than commute, to stabilize and retain its workforce.

Leadership at Springs Valley Bank recognized the situation as an opportunity to innovate.

“We took the bull by the horns and reached out to contractors, the city and other key players,” says Ken Schnaus, vice president and commercial loan officer. “The city had bought a number of homes that were in disrepair and torn them down, so they had lots of available land they could donate to this project. We held some meetings at these sites to discuss the possibilities, the contractor had some surveys done, and now they’re ready to start on the first house.”

In addition to facilitating the effort, called Valley Housing Initiative, Springs Valley Bank & Trust Company has set aside $1 million for low-down-payment construction loans. Loan officers have held three meetings among resort employees and preapproved 10 mortgages. The first home should be ready for occupancy by the end of this year or early 2019.

“This has been a collaborative effort,” Shinabarger says. “It’s a partnership between the municipality, the builder, the resort and the bank.”

—Ed Avis

3 ››› The number of states with Northwest Bank locations

Northwest Bank

Lake Oswego, Ore.
Assets: $615 million

Northwest Bank has branches near Portland, Ore.; in Seattle; and in Boise and Coeur d’Alene, Idaho. “Since we are so spread out, it was hard keeping everyone on the same page, so we created an internal philosophy called One Bank,” says Jamie Shulman, CEO of the decade-old community bank.

The One Bank concept includes an annual meeting that brings together all employees to celebrate successes and socialize, plus semi-annual employee surveys. Each new employee also gets a face-to-face meeting with Shulman after they’ve been with the bank for six months. Among the many ideas that have emerged from One Bank: a mentorship program to help new employees learn the One Bank culture.

—Ed Avis

Serving the underserved

Axiom Bank’s AxiomGO is a “checkless” checking account aimed at banking novices. It pairs a Mastercard with a mobile app, making it easy for customers to make direct deposits, transfer funds and pay bills from their smartphones.

Key stats: The community bank logged 3,000 downloads and opened 1,300 new AxiomGO accounts in the product’s first four months.

Cool features: The My Money Manager function helps customers manage cash flow, create budgets, and set savings goals and spending alerts.

Drivers: Axiom has a large base of underserved customers, with many of its branches located in Walmart Supercenters. The goal was to create an easy-to-use product with minimal fees for people with little banking experience.

Axiom Bank, N.A.

Maitland, Fla.
Assets: $580 million

—Beth Mattson-Teig

Healthy relationships

Adom Greenland, Photo: Lysh Marie

Choice One Bank

Sparta, Mich.
Assets: $620 million

Choice One Bank is partnering with fintechs to provide innovative banking solutions to its customers. For example, the community bank recently worked with Detroit-based Autobooks to offer a fully integrated payments and accounting platform for its small-business customers. The online banking tool integrates receivables, payments and accounting functions in one convenient and secure place.

Adom Greenland, Choice One Bank’s chief operating officer, has these words of advice for community banks interested in forging fintech partnerships:

  • Look locally. You can learn a lot by talking to and getting advice from local fintechs.
  • Get to know the founders. Do their goals, values and service expectations align with yours?
  • Commit. Make sure the right people in your bank have the time to dedicate to moving a fintech relationship and solution forward.

—Beth Mattson-Teig

Screen time

Generations Bank

Seneca Falls, N.Y.
Assets: $280 million

Generations Bank wasn’t just one of the first banks in its region to use ITMs and the universal banker model. It also introduced the “Smart Office” in 2014.

“We cover a lot of area,” says Menzo Case, president and CEO. The bank’s branches are as far as 75 miles apart. And as a small bank, it has just one brokerage advisor who has to travel to all nine branches. The bank needed a way to use its scarce resources to provide better coverage.

Smart Office provides just that. Customers can walk into a video-enabled office at a branch and connect with one of the bank’s business development officers, insurance agents or brokerage advisors. These advisors can also share and print documents, and even accept signatures electronically.

And, in what Case calls the “Brady Bunch screen,” a banking expert can connect with other experts for multi-person videoconferences where needed.

“At one branch, the business development officer happened to be out on a call when a customer came in to talk about a loan,” Case says. “We were able to connect the customer with a business development officer in another branch. We were also able to bring an insurance agent into the videoconference.”

—William Atkinson

3 ways Jefferson Bank’s intranet enhances customer service

Jefferson Bank

San Antonio, Texas
Assets: $1.8 billion

Jefferson Bank in San Antonio launched a new intranet this year, giving frontline employees the information they need to improve customer relationships.

1. Faster search means no more hunting for loan applications while customers sit and wait. “The search functionality in the new intranet is significantly more robust,” says David Quesada, vice president and IT project manager at Jefferson Bank.

2. User input guided the IT team’s design to ensure frequently used documents are easy to get to

3. Job toolkits for relationship bankers, tellers, credit analysts, lending assistants and managers alike mean they have easy access to information that is relevant to their specific roles.

—Susan Thomas Springer

A commitment to Earth—and its people

Summit Bank

Eugene, Ore.
Assets: $375 million

Many community banks are committed to sustainability, but few are as heavily immersed in it as Summit Bank in Eugene, Ore. The $375 million-asset community bank was named a top-three finalist for the Mayor’s Bold Steps Award, and is the only bank in Eugene to have Rethink certification—a program by local recycler BRING Recycling that recognizes businesses with sustainable practices.

We talked with Jenny Bennett, vice president, marketing and business development, and Vickie Cussins, corporate secretary and administrative officer, about the bank’s journey to sustainability.

How did you get started in sustainability?
Vickie Cussins: Sustainability is prevalent in the Pacific Northwest, especially since resources are often limited. Our initiative is actually the result of an employee survey where we asked for ways the bank could improve, and sustainability was high on their list of concerns. We also want to be the best corporate citizen we can be.

What are some examples of your sustainability programs?
Jenny Bennett: Waste management is one area where we excel. We have removed garbage receptacles from all of our workstations and created recycling stations. All employees are now responsible for their own waste. At their desks, they have two bins: one for confidential items that need to be shredded, and the other for mixed recycling.

Cussins: We also have a trading post. When a department needs to order supplies, they go to our trading post first to see if what they need may already be available there.

What expectations do you have for contractors?
Bennett: When we hire contractors, we look for a commitment to sustainability. For example, we are currently involved in a remodel, and the contractor we are using is also Rethink certified.

Are your efforts gaining attention?
Cussins: For the past two years, we have been named one of the 100 best companies to work for in Oregon, and a lot of this is because of our sustainability efforts.

—William Atkinson

Desired skills include: love of community

Success Bank

Bloomfield, Iowa
Assets: $190 million

At Success Bank, new employees rarely come from job ads. Instead, this Iowa community bank seeks people from diverse backgrounds with strong skills who are passionate about their community. They’ve turned a fertilizer applicator into an ag lender, a mail carrier into a teller and a mechanic into a consumer loan officer.

“You can teach banking and regulations, but you can’t as easily teach ag experience, love for the community or the relationships new employees bring to the table,” says Alexis Henderson, vice president of marketing.

Bloomfield, Iowa, is a small town of just over 2,600 people. Managers therefore often recruit candidates through community connections. They don’t require specific job experience or college degrees. They may even bring new hires onboard before a job description is fully defined. Employees learn the industry by shadowing their new colleagues, including tellers, personal bankers and lenders. As employees’ talents grow, the community bank gives them new opportunities.

Success Bank pays at the top of its market to discourage future leaders from being lured away. Henderson says most of the bank’s 32 employees have worked there for more than 10 years, with some employed for 55 years.

“You’re giving a chance to someone for a role they might not have thought they were qualified for,” she says. “It certainly builds loyalty. We have a high retention rate.”

By hiring people from nontraditional employment backgrounds, Success Bank benefits from fresh ideas and perspectives. Its approach also promotes outstanding customer service: Many new hires grew up on family farms, so they speak the language of agriculture and are already connected to that community.

“Finances are a confidential matter,” says Henderson, “so if they already know they can trust you from a previous business experience, then it’s a lot easier than introducing a new lender.”

—Susan Thomas Springer

It’s all about customer care

River Valley Bank

Wausau, Wis.
Assets: $1.3 billion

One morning, a financial specialist at a River Valley Bank branch helped a customer reconcile his checkbook. Later that day, the same customer came back, again asking the specialist to reconcile his checkbook.

At another branch, a customer came in and said he was there to pick up his wife. “He thought the bank was a dental office, and the team members knew that his wife had been in a nursing home for quite some time,” says Rhonda Lewis, senior administrative assistant.

In both cases, bank team members knew exactly what to do. Lewis’s father passed away from dementia three years ago. As a result of that experience, she began volunteering to train employees at local retail establishments, restaurants, banks and churches on how to create dementia-friendly environments. Eventually, Lewis expanded her efforts to training River Valley Bank employees at all of the bank’s 15 locations in Wisconsin and Michigan. Training occurs in person and by videoconference.

“A program like this is particularly important these days, as millions of baby boomers are now in their 60s and older.”
—Rhonda Lewis,
River Valley Bank

Participants include managers, HR, compliance, lending and, of course, the bank’s frontline financial specialists, among many others.

“Training focuses on helping employees identify customers who may be experiencing dementia or any other cognitive impairment, and then, as much as possible, helping them maintain their independence and dignity while protecting them from problems, such as unpaid expenses and squandering resources,” Lewis says.

In tricky situations, River Valley Bank may also contact account co-holders or individuals with financial power of attorney. In most cases, the branch manager gets involved, and if necessary, so does the fraud department.

“A program like this is particularly important these days, as millions of baby boomers are now in their 60s and older,” Lewis says.

—William Atkinson

What does a dementia-friendly branch look like?

  • If an employee suspects that a customer has dementia, they let their manager know.
  • The manager checks if the customer has an account co-owner or someone with financial power of attorney.
  • If so, the manager contacts that person and explains the bank’s observations.
  • If not, the manager first contacts the fraud department and then, if necessary, contacts a local aging resource center, which can request a “wellness check” on the customer.

Beyond that, says senior administrative assistant Rhonda Lewis, the bank can’t do much but continue to monitor the account to make sure that fraud is not taking place.

Clear Mountain Bank employees Brooke Spring, Logan Mouser and Melissa Mouser used their Clear Mountain Cares day to volunteer at World Vision Appalachia. They unloaded and organized donated items that will be distributed to local schools, homeless shelters and families in need.

Clear Mountain Bank

Bruceton Mills, W.Va.
Assets: $585 million

A legacy of volunteering

My brother, Brian F. Thomas, was president of Clear Mountain Bank from 1998 until he died in 2016,” says Dave Thomas, president of Clear Mountain Bank. “Every decision he made was guided by how it would impact the community. It wasn’t lip service—he rolled up his sleeves and volunteered. We created the Clear Mountain Cares program in his honor. Our employees are granted one paid day off of work to volunteer in the community.

“Our goal is to log 500 volunteer hours by July 31, and we’re well on our way. We’ve had folks at local animal shelters, Habitat for Humanity, local food pantries and many other organizations. It’s really been neat to see how many different organizations we’ve been able to impact.”

—Ed Avis

0 ››› Number of human resources FTEs at Intracoastal Bank

Intracoastal Bank

Palm Coast, Fla.
Assets: $325 million

Thanks to new cloud-based software that handles payroll and human resources, just two Intracoastal Bank employees are responsible for HR—and it only forms part of their roles.

In 2017, the 40-employee Florida bank adopted an HR solution from Illinois-based Paylocity. The solution covers a whole range of HR functions, from online recruiting to automatic onboarding and electronic employee reviews. Employees use the Paylocity mobile app to access 401(k) and health benefits, request vacation time and submit electronic expense reports with restaurant receipt photos they snap on their smartphones. They can even show their virtual pay stub as proof of income when car shopping.

Cheryl Tanenbaum, SVP/CFO at Intracoastal Bank, is a fan of this slimmed-down approach. “It shows we’re invested in our employees and inspires us all to go paperless,” she says.

—Susan Thomas Springer

In the business of risk management

Cross River

Teaneck, N.J.
Assets: $1.19 billion

President and CEO Gilles Gade tells us how Cross River has not only survived but thrived despite opening its doors during the Great Recession.

“We realized soon after the financial crisis that traditional banking services and loans were becoming less accessible to consumers. [As] a nimble community bank, we moved quickly to invest in our technology. In retrospect, this decision was the best we have ever made and truly aligned with our core value of financial inclusion by providing credit to those without access.

“We are in the business of risk management, not risk elimination. Obviously, these relationships present an elevated risk profile to our institution. Our approach revolves around evaluating the risks, quantifying them, comparing the risks to our tolerance levels and developing regulatory compliance programs to protect our institution and the consumers.

“Cross River adopts an API-first strategy. This includes access to payment rails, automated solutions, core processing functionalities, payment gateways, sub-account ledgers, reconciliation modules, etc. [It] allows the company to bring products and services to market faster.

“We encourage all banks to challenge the status quo of the core processing environment and explore API-driven products and services. … The next wave of innovation is more exciting than ever.”

—Colleen Morrison

Tech-nurtured customer relationships

Northern Bank & Trust

Woburn, Mass.
Assets: $2 billion

Northern Bank & Trust has been a top-performing New England bank for eight years running, but there’s no resting on those laurels. “If we’re not innovating, we’re falling behind,” shares Warren Brown, head of emerging markets and vice president. “While we are a top-performing community bank today, we have to make sure we don’t become the most successful horse-and-buggy company at the time of the advent of the automobile.”

A deep understanding of customer needs anchors its innovation strategy. Northern Bank & Trust views technology as a way to extend the community bank value proposition. For example, by partnering with an account aggregator to pull customers’ transaction data from multiple sources, the bank can help its customers better manage their finances.

“Historically, you as a business owner could walk into your community bank and the bank employees knew who you were, and they had sufficient insight that they could provide advice,” says Brown. “Technology allows us to deliver that same relationship, just in a different way and to a broader range of businesses.”

—Colleen Morrison

3 ››› The number of guiding principles in Somerset Trust Company’s technology vision

  1. Control its destiny
  2. Offer product differentiation
  3. Create a sense of internal pride by being first to market

Somerset Trust Company looks to fintech providers to bolster its technology portfolio, but any company it works with must share its corporate philosophy.

“Everybody talks about creating a partnership versus engaging a vendor,” notes John Gill, Somerset Trust Company’s chief operating and risk officer. “I believe we really live that.”

—Colleen Morrison

Fun for a cause

Heard on Hurd Festival

Citizens Bank of Edmond, Edmond, Okla.
Assets: $260 million

“The Heard on Hurd Festival is fun!” says Aimee Yarbrough, operations officer, Citizens Bank of Edmond. “We get to come out and host a party for our city once a month between March and October. And that’s all it really is. We would love for you to come bank with us, but you don’t need to be a customer to enjoy this event, which is what community is all about.

“We have 20 volunteer slots each month and they fill up fast. It’s funny—some people have their spot and they want it every month. It’s a well-oiled machine.

“We donate money from beer and T-shirt sales to Edmond Public Schools. Last year it came to about $10,000.”

—Ed Avis

Contributing writers:
William Atkinson, Illinois; Ed Avis, Illinois; Beth Mattson-Teig, Minnesota; Colleen Morrison, Virginia; Susan Thomas Springer, Oregon