Meet ICBA’s top industry loan producers for 2019. Whether they specialize in agricultural, consumer or commercial lending, they’re keeping America’s economy moving.
By Beth Mattson-Teig
Consumer and mortgage
Creating a culture of individuality
Category: Consumer ($500 million to $1 billion)
Asset size: $542 million
Consumer loans to assets ratio: 72.48%
Rank in category: 3
Mechanics Bank fosters a fun and personal approach to keep customers coming back.
Mechanics Bank credits a number of factors for the growth of its consumer loan production. It could be its long history in the community, or it could be its use of educational videos, social media and creative marketing. But the foundation of its strategy hinges on a simple philosophy: It’s all about people.
“We want to take each person that we come in contact with and create a unique experience for them,” says Mark Masters, president and CEO of the $542 million-asset Mansfield, Ohio, community bank. “In particular, when we’re talking about consumer and mortgage lending, we’re trying to help our customers consider us to be a trusted advisor.”
Despite the rise of online lending competitors, Mechanics Bank has found that more than 90% of its customers prefer to sit down and talk to a loan officer face to face. “That’s what our lenders do to really listen and figure out what is best for our customers,” says Deborah Adams, the bank’s executive vice president and lending supervisor. Loan officers listen to customers, answer questions and get to know customers as individuals to better understand their needs.
Mechanics Bank has seen a significant increase in its consumer loan production over the past five years, with an annual growth rate averaging about 16%. The bank is well known in the community for its residential mortgage lending. The community bank has nine offices and a team of seven full-time consumer and mortgage lenders, as well as seven branch managers who oversee lending at individual offices.
Every bank gets plenty of phone and online inquiries about loan rates or terms. Mechanics Bank recognizes that it’s tough to compete only on that level, because there’s almost always another lender willing to offer a better deal. “We try to never let the inquiry end with a phone response,” Masters says. “We want to sit down with the borrower and help them understand, based on their needs, how our product can help them and position them for the future.”
A testament to that trusted advisor role is the fact that the community bank has turned down loan requests only to see those same applicants return in the future. Lenders give valuable advice so that borrowers are able to come back and obtain a loan when their circumstances are different.
Founded in 1886, Mechanics Bank has a long history of serving Richland County. The community bank continues to reach new customers through video and guerilla marketing in social media and original educational and strategic marketing. The bank also tries to have a little fun in the process. It created a YouTube video with a staffer disguised as a talking ATM who chatted with customers and handed out extra cash to drive-up customers who were willing to sing, car dance or take selfies.
We’re trying to create a culture that is unique and easily recognizable to our customer base.”
—Mark Masters, Mechanics Bank
“We’re trying to create a culture that is unique and easily recognizable to our customer base,” Masters says. “We try to do fun things online that capture their attention, and we try to demonstrate that what they will find at our bank is different than what they find elsewhere.”
M&A activity fuels growth at First Bank
Category: Commercial ($1 billion or more)
Asset size: $1.8 billion
Consumer loans to assets ratio: 65.35%
Rank in category: 6
The New Jersey community bank has seen robust growth through its M&A strategy and by cultivating lasting customer relationships.
Commercial lending at First Bank in Hamilton, N.J., has soared in parallel with its rapid expansion. Founded in 2007, the community bank has acquired three small financial institutions in the region over the past five years, which has helped boost its asset size to more than $1.8 billion.
First Bank’s commercial lending business has clearly benefited from its acquisition strategy, which has expanded its geographic footprint to 18 branches across New Jersey and Pennsylvania. “We want to continue to grow the bank, and M&A is part of what we do,” says Peter J. Cahill, the community bank’s executive vice president and chief lending officer. Earlier this year, First Bank announced plans to acquire Grand Bank in Hamilton, N.J., in a deal that is still pending regulatory approval.
Yet even without the flurry of acquisitions, the bank has been achieving robust organic growth. Its assets have increased by more than $1.2 billion in the past five years, and 60% of that growth has been organic.
Its lending platform—90% of which is commercial loans—is also enjoying strong organic growth. The community bank’s loan portfolio, excluding last year’s acquisition of Delanco Bancorp, grew by $178 million in 2018, an annual rate of 15%.
Keeping things personal
First Bank sits in the middle of a densely populated area where there are a lot of businesses—and banks. People and relationships are a key part of serving that market of business and commercial real estate customers, and the bank employs 22 relationship managers (RMs).
We like to do as much business as we can with clients.”
—Peter J. Cahill, First Bank
“When we hire new RMs, we spend a lot of time making sure we hire the right people,” Cahill says.
First Bank has a board of directors that consists of former bankers and other professionals, such as real estate developers and CPAs. “We believe in networking and referral sources. We like to do as much business as we can with clients, and then we talk to them about their clients, associates, friends and neighbors,” Cahill adds.
As a community bank, another factor that gives First Bank an edge in the competitive lending market is its flexibility and access to decision makers.
In the past 18 months, First Bank has created a regional structure to put more focus on regional decision-making and accommodate its growth in its target markets. The community bank now has a president in each geographic region, including eastern Pennsylvania, central New Jersey and northern New Jersey. “That has been very positive, because it improves turnaround time and lets customers and prospects know that they are dealing with a decision maker who has authority,” Cahill says.
First Bank is willing to follow its customers to new markets. If a bank customer in Trenton, N.J., wants to buy an investment property in Florida or somewhere in the Midwest, the bank will work with the customer to do that financing even though the property is outside of its footprint.
“Our view is that with the right clients and appropriate legal help, we’re willing to take on that type of risk for real estate loans,” says Cahill, “and that’s the type of flexibility we bring to folks.”
Next-generation ag lending
Bank of Glen Ullin
Glen Ullin, N.D.
Category: Agriculture (less than $500 million)
Asset size: $58 million
Consumer loans to assets ratio: 77.93%
Rank in category: 2
Bank of Glen Ullin supports its hometown community of farmers who are changing with the times.
The basis for any good agricultural lender is understanding farming, and that is certainly true of North Dakota’s Bank of Glen Ullin. Both of the bank’s loan officers, Bob Spangelo and Bruce Morman, know farming because they are farmers. “That goes a long way, because they fully understand what our customers are going through,” says Jolene Muscha, president of the $58 million-asset bank.
Bank of Glen Ullin is an active ag lender that has been serving its local community in western North Dakota since the community bank was founded in 1944. In fact, more than 95% of the bank’s loans are with farmers who typically raise cattle and grow wheat, corn and sunflowers.
Muscha attributes the bank’s growth in ag lending to changes occurring in the farming industry, rather than an influx of new customers moving to the rural area. Family farms are often handed down from one generation to the next. However, today’s farmers are recognizing that they can no longer survive by farming like their grandparents once did, Muscha says. Farmers used to be able to harvest their wheat, corn or sunflowers, haul it to the elevator and take the price that was available at the time. “That is just impossible [if you want] to make a profit in farming,” she adds.
Over the past three years, Bank of Glen Ullin has encouraged its customers to set up a marketing plan by working with commodity brokerage firms on pricing options to ensure that they can get the right price for their crops. The bank has formed relationships with vendors that will sit down at a farmer’s kitchen table and teach them how to protect pricing. That way, when they plant a crop in April or May, they know what they need to get for a price to cover their costs. The bank manages the bookkeeping on those marketing plans, which are used to provide lines of credit to secure pricing options.
We’re very focused on what’s going on in our community and how we can be a part of it.”
—Jolene Muscha, Bank of Glen Ullin
Although Bank of Glen Ullin is helping farmers adapt to a new way of doing things, one thing that has remained steadfast is its commitment to supporting the community. As a part of that farming family, the bank’s lenders can talk ag loans just as easily as they can debate the best insecticides or fertilizers. Both Spangelo and Morman get time off from their bank duties when they need to tend to farm business—or help a fellow farmer by driving a harvest truck. “We’re very focused on what’s going on in our community and how can we be a part of it,” Muscha says.
That focus on relationships also means that farmers aren’t just a number or name on a loan. “The philosophy that we have here is that we’re partners,” Muscha says. As the financial partner, the bank wants to know how things are going, she adds, especially at the end of the year when they can discuss what worked, what didn’t and what customers want to do to be more successful.
Beth Mattson-Teig is a writer in Minnesota.