Community Bank Industry Charge off Rates by hbr71620


Community Bank Industry Charge off Rates document sample

More Info
									                                      Community banking’s best and brightest

                                         his month Independent Banker puts a spotlight on
                                         community bank superstars. They represent the best of
                                         community banking—commitment to quality, a knack for
                               ingenuity, a working integrity in business practices and a sense of
                               service to the community.
                                Each person is great at what he or she does, and all were named by
Illustration by Matt Collins

                               their bosses or peers as shining stars. These bankers serve in
                               abundant good company among thousands of peers throughout the
                               country who themselves serve their institutions and communities
                               with passion and excellence.
                                                                                      02|2007 IndependentBanker 55
                               James Walker                          attributes you can have,” says David Locke,
                               McFarland State Bank                  McFarland State Bank’s CEO. “That innate ability
                               Executive Vice President of Lending   is what has fostered a lot of relationship building for
                            Community banks often look for           our bank. We are the fastest growing bank in the
                            individuals that can make                county and Jim has a lot to do with that.”
                            significant contributions to their                                         —Ruth Suarez Zane
                            local community, and the exec-
                            utive team at McFarland State                                 Thad Hutcheson
       Bank in McFarland, Wis., proved no exception when                                  T Bank, N.A.
       they targeted James Walker to join the bank’s lending                              Chief Technology Officer
       team. In the 10 years since then, Walker has built the                             Of the various attributes people
       bank’s loan portfolio more than 500 percent, while                                 generally associate with bank
       delinquency rates consistently fell below industry                                 executives, “proselytizing zeal”
       norms and charge-off rates remained at zero.                                       usually isn’t one of them.
         Colleagues and customers alike credit Walker’s                                      But it’s something that Thad
       creativity and flexibility to his success in lending          Hutcheson, chief technology officer for Dallas-
       and in ultimately helping the bank grow from $100             based T Bank, N.A., has in spades. He admits he
       million in assets five years ago to nearly $300               didn’t have a traditional banking background
       million today.                                                (Hutcheson majored in computer science) or
         “Be it real estate or any business, customers are           experience. “I hadn’t worked in the banking world,”
       going to look for a bank that understands the                 recalls Hutcheson, whose full-service community
       relationship is a partnership where the two are               bank primarily targets owners of small businesses. “I
       growing together,” says Bruce Neviaser, general               had worked with media firms doing digital and
       partner of Continuum Investment Partners.                     audio manipulation.”
         Over the years Neviaser has sought funding from                “Banking is a very conservative, slow-to-adopt-to-
       larger institutions, but says local banks like                technology business,” says Hutcheson, who was
       McFarland St ate have converted him to a                      determined to make the $110 million-asset T-Bank a
       community bank customer for life. At one point,               model for others to follow.
       Neviaser weathered a $50 million loan that ended                 Not only has Hutcheson achieved his objective
       up taking nine months at a large bank and only six            with relative ease, but he’s shared his bank’s
       weeks at a community bank, he explains.                       technology success with others along the way by
         Community banking wasn’t always in the cards                speaking at the Technology Summit, an annual
       for Walker either, but, having grown up in a small            banking technology conference, last year.
       Iowa community where his family owned a car                      “We’ve basically used content management
       dealership, Walker developed people skills as part of         systems and document management systems to re-
       his upbringing. “I just knew that community and               move a lot of the paperwork used in daily banking,”
       service is something you simply expect,” Walker               says Hutcheson, an Eagle Scout who was born in
       says. “I saw how my father handled customer service           Paris while his father briefly worked overseas.
       in his community every day. I knew it was                     “We’ve never handed out a single piece of paper at
       something that I wanted to be involved in.”                   any loan meeting we’ve ever had! And that’s with
         Walker went on to earn a degree in economics,               hundreds and hundreds of loans being looked at.”
       and community banking entered the picture when                    Hutcheson has also overseen the implementation
       he struck up a conversation with someone at his               of multiple-display and remote-deposit technologies
       commencement ceremony. Since then, Walker’s 30                at T Bank.
       years in banking have been built at five different                Now 28, Hutcheson says he is always mindful of
       community banks, and Walker and his family have               the fact that not everyone is as fond of technological
       always lived within those respective communities.             innovation as he is. So he carefully picks and
         “Jim is a natural when it comes to people skills,           chooses which technologies to present to his
       being a collaborator and an empathizer. In                    colleagues. “One of my jobs is to determine what
       commercial lending, that’s one of the strongest               technology makes us more efficient as a bank.”

56 IndependentBanker 02|2007
    Hutcheson has done an admirable job in that re-      in assets? Paragon Commercial Bank has freely
gard, says T Bank Chief Lending Officer Steve Jones,     shared its business model with other community
who jokes that the “T’ in T Bank stands for Thad.        banks—although Pierce insists that its success is
    “Everything he gets us involved in just turns to     difficult to duplicate because great teamwork and
gold,” Jones praises. “He does a lot of training and     great employees are rare assets. “You want to make
getting people comfortable with the technology.          sure you have the right people on the bus and in the
And Thad runs the IT meeting we have every               right seats,” Pierce says.
other month.”                                               Pierce’s talents, for one, are difficult to duplicate.
    When it comes to introducing technology to a         Not only does he oversee the bank’s technology, he
banking environment, “some people aren’t easily          has to balance
swayed,” Jones notes in a classic bit of                 relationships
understatement. But he says Hutcheson has done           with vendors           “Greg is an ‘in the trench’
yeoman’s work in terms of getting T Bank                 and stay in the        type manager and
employees to wrap their heads around the ways            good graces of
technology can maximize productivity.                    regulators.
                                                                                performer, teaching and
    “It’s been amazing to watch him learn banking,          “Greg com-          often doing part of the
to take what we’re doing and become respected with       bines a unique         tasks himself as needed.”
our third-party suppliers,” Jones says.                  style of day-to-
    Hutcheson’s introduction to T Bank was               day      humor                  —Terry Pope, Residential
serendipitous, to say the least. His college roommate    along with his             Construction & A&D Lending
is the son of T Bank’s founder and CEO, Patrick          keen analytical
Adams. The first person Adams hired for his new          mind to ac-
bank was Hutcheson, an avid hunter who’s slated to       complish things that others often stumble with, and
get married in 2007.                                     [he] achieves those goals much faster as well,” says
     Regardless of how Hutcheson got through T           Terry Pope, senior vice president, Residential
Bank’s front door, his impact at the financial           Construction & A&D Lending.
establishment has been appreciable, in Steve Jones’         “Greg is an ‘in the trench’ type manager and
view. “He’s revolutionized the way we do our bank-       performer, teaching and often doing part of the tasks
ing,” Jones says simply.                                 himself as needed,” Pope explains. “Whether its
                                      —Blair S. Walker   intranet banking, banking statements or operational
                                                         efficiency, no one I know does it better.”
                    Gregory Pierce                          That determination to do things well from the
                    Paragon Commercial Bank              get-go has long characterized Pierce’s approach to
                    Operations Officer, Senior Vice      his work. In one of his earliest jobs out of college,
                    President                            Pierce was a sports stringer for a small local
                       Gregory Pierce was just the       newspaper. His editor, Clifton Barnes, who still net-
                       ninth employee at Paragon         works with him 23 years later, says his first story
                       Commercial Bank in 1999           barely needed any reworking—a rarity those in the
                       when the community bank’s         editing profession confirm.
network crashed. As everyone looked around, Pierce          “I found out some time later that he had studied
asked, “Who should we call for the network?” To          my writing beforehand and knew what I liked,” says
which he was told, “That would be you.”                  Barnes, who today runs his own communications
   The operations officer and senior vice president      consulting firm, CB3media. The two men shared a
for Paragon Commercial Bank gladly learned all he        love of sports and maintain strong business and
could and to this day says that one of the perks of      community ties.
working at the bank is wearing different hats. “I love      “He underst ands that getting business for
the flexibility. Every day is different.”                someone else, and introducing people to each other
   So how does a community bank with nine                who will do business together, will eventually help
employees and $25 million in assets grow into what       him in his business,” Barnes explains.
is currently an 80-employee bank with $630 million                                          —Ruth Suarez Zane

                                                                                       02|2007 IndependentBanker 57
                               Dawn E. Gibbs                        Her product training is just as effective. Gibbs
                               The Ohio State Bank               introduces new products in laymen’s terms, explains
                               Training/Compliance Specialist    their benefits for customers, then offers valuable
                             Not many employees at The           sales techniques, Hansel explains. In the end,
                             Ohio State Bank in Marion,          employees sell more because they can talk more
                             Ohio know their way around the      intelligently and comfortably about a product.
                             bank like Dawn E. Gibbs. Over          Still, Gibbs’ biggest challenge involves the
                             the past six years, she has held    conservative nature of the industry. Sometimes, she
       six different positions ranging from bank teller to her   says it’s hard to get buy-in from departments to
       current role, training/compliance specialist.             abandon stale or conventional procedures in favor
          Gibbs loves to learn, which has been the source of     of more efficient banking practices.
       her motivation throughout her banking career. She            Meanwhile, she continues to learn from those
       constantly tackles new areas to round out her banking     around her, seeking out opportunities that will
       skills and knowledge. For example, she developed          sharpen her own training and development skills.
       and revised hundreds of the bank’s policies and proce-       “I’m always going to take opportunities to not only
       dures. And when the bank recently acquired two            climb higher for myself, but [also to go] where I
       branch offices from another bank, she volunteered to      think I’m needed,” says Gibbs. “The path I’m taking
       serve on a committee that handled the merger and          is you build and you build and you learn off each
       helped integrate different technology systems,            thing. I am not afraid to get in there [and learn].”
       marketing materials, products, cultures and people.                                               —Carol Patton
          “My unique niche is I’m able to look at [things]
       from all different angles,” says Gibbs, at the $143                            Frank Smith
       million-asset bank. “I’m able to take something that’s                         First American Bank & Trust
       possibly complex, break it down, and write [policies                           Financial Services Representative
       and procedures] in such a way that anybody can                                   When Hurricane Katrina came
       come in here with no banking experience                                          boiling off the Gulf of Mexico to
       whatsoever and get through this.”                                                ransack New Orleans, first and
          Her favorite task is training, she says, because it                           foremost on Frank Smith’s mind
       allows her to creatively explore ways to convert dry                             was the safety of his fellow
       topics into fun activities or motivate the bank’s 52      Louisianans. In the wake of the marauding storm,
       employees to stay abreast of emerging software and        Smith, like many community bankers in the
       industry regulations.                                     storm-damaged areas, reached out to help their fel-
                                                                 low Louisianans rebuild.
                                                                    “When a hurricane knocks everything down,
  “I’m always going to take oppor-                               someone’s got to build it back up,” says Smith,
                                                                 whose six-foot-seven stature and easy-going sales per-
  tunities to not only climb higher                              sona have helped him build the bank’s investment
  for myself, but [also to go] where                             and insurance sales as much as it has made him
  I think I’m needed.”                                           accustomed to operating in rarefied air.
                                                                     “We do realize in our business that when some-
         —Dawn E. Gibbs, Ohio State Bank                         thing like this happens, assets tend to move around
                                                                 quite a bit,” he says. “It does create opportunities for
                                                                 us from a [financial] planning standpoint.”
          Cathy Hensel, the bank’s vice president of                Such was the case with First American Bank &
       operations, believes Gibbs is a natural when it           Trust, which saw increased sales of investment and
       comes to training. “She comes up with current             insurance products for the $645-million-asset bank.
       situations that are common to tellers or backroom         Some of the upturn in Smith’s business can be
       [employees], turns role play into fun, comes up           attributed to storm victims receiving payments from
       with graphics, quotes or sayings to make it more          insurance companies and from the federal
       interesting,” says Hensel.                                government. Then there are general contractors

58 IndependentBanker 02|2007
      who’ve found themselves awash in revenue              married father of two, Smith doesn’t receive sales
      associated with post-Katrina construction projects.   commissions. That partially explains why Smith is
         He conservatively estimates his sales volume has   so successful with storm victims, who can be highly
      gone up 40 percent since the storm howled through     emotional and very guarded with their money, says
      Louisiana.                                            Bill Reid, president of ICBA Financial Services
         Smith receives a salary from First American Bank   Corp., ICBA’s retail financial services subsidiary for
      & Trust, although he has signed a dual-capacity       community banks.
      contract with ICBA Financial Services Corp. A            “Frank’s far more interested in the well-being of
                                                                                  his customers,” Reid says of
                                                                                  Smith. “Unfortunately, many
                                                                                  people in the investment
                                                                                  business are more interested in
                                                                                  how much they can generate in
                                                                                  commissions than the well
                                                                                  being of their customers.
                                                                                      Clients have entrusted Smith
                                                                                  with accounts ranging in value
                                                                                  from $500 to seven figures, and
                                                                                  those clients run the gamut
                                                                                  from a retired bus driver Smith
                                                                                  recently worked with, to CEO’s
                                                                                  of large corporations.
                                                                                      Since Katrina’s onslaught in
                                                                                  late 2005, Smith’s biggest sellers
                                                                                  on the investment side have
                                                                                  been variable annuities and
                                                                                  mutual funds, says Sal Quar-
                                                                                  tararo, a First American Bank &
                                                                                  Trust senior vice president. On
                                                                                  the insurance side, Smith has
                                                                                  excelled at selling whole life
                                                                                  policies with fixed annuities.
                                                                                      Born and bred in Louisiana
                                                                                  and a onetime st arting
                                                                                  basketball forward with Loyola
                                                                                  University in New Orleans,
                                                                                  Smith finds that treating
                                                                                  Katrina’s victims with sensitivity
                                                                                  and respect is second nature.
                                                                                      “We’re doing business the
                                                                                  right way,” says Smith, who
                                                                                  worked for an insurance firm
                                                                                  before joining First American
                                                                                  Bank & Trust. “Obviously,
                                                                                  banks value their relationships
                                                                                  with customers, as well as their
                                                                                  image in their communities.
                                                                                      “So it’s our obligation to de-
                                                                                  velop business while upholding
                                                                                  that image.” —Blair S. Walker

60 IndependentBanker 02|2007
                     Susan Salecky                        gets it done. The amazing thing is at the end of the
                     Bankers’ Bank Northeast              day she can step away from it all and see the forest
                     Vice President, Director of Client   for the trees.”
                     Services                               When Salecky st arted with Bankers’ Bank
                      As vice president and director of   Northeast in 1998, her initial responsibilities
                      bank client services at Bankers’    included developing and building a coin and
                      Bank Northeast in Glastonbury,      currency product, which would sell cash and coin
                      Conn., Susan Salecky handles        to community banks so they could avoid purchasing
anything and everything that
relates to customer service.
   “I live on the phone and try
to keep my ear to the ground,”
she says. “I have no problem
picking up the phone and
calling somebody to say, ‘Can
you tell me what’s happening?’”
   Looking back, Salecky says
that solving problems has
been an inherent part of
almost every banking position
she has held since entering
the industry in 1980.
   In her mind, problems
aren’t headaches to get rid of,
but fun challenges to be
solved. Because of this
attitude, she looks at the big
picture and st ays calm
whenever everybody else is
panicking, which enables her
to develop non-conventional
solutions to traditional
problems. The bank’s 20
employees consider her as the
go-to-gal, soliciting her
assistance and advice on all
sorts of situations ranging from
resolving contract issues to
communicating bad news to
bank customers.
   “She impresses me with
being able to come up with
solutions at high levels and
transaction levels and does it
with a sense of humor,” says
Peter J. Sposito, president and
CEO at the $84.8 million-
asset bank. “There’s a lot of
pressure, a lot of deadlines.
She somehow sorts it out and

                                                                                            02|2007 IndependentBanker 61
       money (often a cumbersome process) from the                has always been a big believer in empowering staff
       Federal Reserve.                                           and leading by example. Whether it’s blowing up
         When the product was launched, only five banks           balloons for a local gala or speaking to 500 people at
       were interested. Seven years later, 700 banks              a chamber of commerce event, he feels his own
       participate, largely due to Salecky’s problem-solving      actions reflect the bank’s reputation.
       skills. She tells the story of how one bank was                    So he began serving on multiple boards of
       interested in buying currency from the                                directors for various associations and civic
       institution, but Bankers’ Bank North-                                     groups, such as the local chamber of
       east did not have a vault in that                                           commerce, rot ary club and
       bank’s area. Instead of passing up                                           symphony. He says it’s important to
       the opportunity to service a new                                              get involved at all levels of
       customer, Salecky found anoth-                                                 community service for a number
       er bank in the area—about 100                                                  of reasons. Performing charitable
       miles away—that was located in                                                 actions will influence other
       a strip mall and accepted lots of                                             employees to volunteer and
       cash on a daily basis. It didn’t                                             ultimately position the bank as a
       take long before an agreement was                                           valuable, local resource, he says.
       reached. Bankers’ Bank Northeast                                            But what wins his colleague’s
       began purchasing this bank’s excess                                    admiration is his leadership style.
       cash and resold it to their new customer.                           “He empowers employees to make decisions
         Salecky also oversees quality control for all of         and learn from some of their mist akes,” says
       Bankers’ Bank Northeast’s 22 different services,           Matthew J. Skarr, vice president at the bank. “Dave
       including an international product that involves           possesses the ability to analyze a situation without
       overseas wire transfers, check collection and buying       letting his emotions come into play. It’s really a
       foreign currency.                                          blessing to have somebody like him to report to.”
         “I have an extreme loyalty and passion for what I          Since he assumed his current position, Lillis has
       do,” Salecky says. “I’m not afraid of change—I             been busy building a culture of empowerment and
       actually embrace it. I feel that you get something         accountability, which offers key benefits. It elevates
       out of that change and it stimulates [you], keeps you      employees beyond order takers, makes them feel
       thinking and helps you think outside the box. I            more comfortable thinking outside the box, and
       really like that kind of activity.”                        prevents them from pointing fingers or placing
                                                —Carol Patton     blame on others. It also speeds up decision-making,
                                                                  which improves customer service.
                               David J. Lillis                      And it helps nurture skills sets key to helping the
                               First National Bank of             bank reach target markets. Take, for example, his
                               Naperville                         loan officers, many of whom lacked formal com-
                               Executive Vice President           mercial lending training. During group meetings
                             Over the past two years, the         Lillis would often pose a series of questions to the
                             First National Bank of               officers, challenging them to expand their market
                             Naperville, Ill. has increased its   knowledge and share their insights with colleagues.
                             asset size by 30 percent. Among      Over time, his list of questions diminished as the
       the reasons for the bank’s growth is David J. Lillis.      loan officer’s knowledge-base expanded. They were
         When Lillis was promoted in 2005 from vice               learning, starting to process information and make
       president of lending to executive vice president, the      decisions in a logical order, he explains.
       bank already had a strong foundation and direction.          A believer in continued learning, Lillis is himself
       “I stepped in and kept the ship going,” he says,           enrolled in an executive master’s of business
       adding that bank now has assets of $300 million. “I        administration program at Notre Dame to hone “his
       didn’t do anything drastic.”                               leadership style and business knowledge,” he says.
         Some of the bank’s 75 employees would disagree.            Meanwhile, he considers himself lucky to be
       Lillis, who’s a certified public accountant by trade,      surrounded by such capable employees. “I’m never

62 IndependentBanker 02|2007
        really satisfied with the status quo,” he says, adding     consuming trip of crossing the border to deliver the
        that customers sometimes cont act him and                  debit card and visit with him, Jones explains.
        comment on the positive changes among his staff. “I          In another situation, an elderly customer had
        hope employees show an enthusiasm for growing              been in a nursing home for more than one year.
        and making us the best bank in town.”                      McGill worked diligently with the customer’s
                                               —Carol Patton       attorney and financial advisors to ensure the
                                                                   customer’s assets were protected. McGill went on
                                Cheryl McGill                      to visit the customer on her lunch hour and bring
                                Old Mission Bank                   her treats. Without any family in the area, McGill
                                Customer Service Representative    was often the customer’s only visitor.
                             Cheryl McGill has always been           Supervisors and coworkers marvel at the ease with
                             a crowd pleaser, from her days        which McGill drops whatever she is doing to pick
                             belting out popular tunes as the      up conversations with customers that visit Old
                             lead singer in her rock band to       Mission specifically to see her. “She has a great
                             her current role as a customer        following of people and knows her customers, their
        service representative at Old Mission Bank in Sault        kids—she has just gone above and beyond,” bank
        Ste. Marie, Mich.                                          president David Firack says. “If the industry had
          During her 15 year singer career McGill could            more like her, we’d all be the better for it.”
        always read the crowd and get them on their feet                                            —Ruth Suarez Zane
        with current pop songs or oldie-but-goodie
        Beatles’ numbers. These days she puts her acquired                               Tonya Brothers-Bridge
        banking skills to work servicing the $82 million-                                German American Bank
        asset’s bank’s customers.                                                        Senior Vice President
          It’s not unusual for McGill to make house calls,                               Speaking with her academic
        including driving to nursing homes and hospitals to                              adviser in college, Tonya
        assist customers with transactions. “You go the extra                            Brothers-Bridge said she didn’t
        step because they are our customers and we are                                   know what profession she
        lucky to have such great customers,” McGill says.                                would pursue, but it definitely
        “It’s what anyone at our bank would do.”                   wouldn’t be banking! This sentiment stemmed from
          McGill might be modest about her good deeds, but         her perception of the industry as “very conservative
        her colleagues don’t mind bragging about her selfless-     and not particularly dynamic.”
        ness. “I have been in the financial industry for over 20      Now a senior vice president with German
                                                                   American Bank, in Jasper, Ind., Brothers-Bridge
                                                                   today chuckles at her early naïve impressions. In
“You go the extra step because they                                charge of retail banking, marketing, training and
                                                                   electronic delivery for German American, she fully
are our customers and we are lucky                                 appreciates how innovative and fast-paced banking
to have such great customers.”                                     can be.
                                                                       She recently oversaw the rollout of a new credit
         —Cheryl McGill, Old Mission Bank                          card line for German American, which has $1
                                                                   billion in assets, 29 offices and six affiliate banks, all
                                                                   located in southern Indiana. “We did a pretty
        years, and I have never met a customer service repre-      extensive analysis of our credit card portfolio to
        sentative who cares for her customers like Cheryl          make sure we had the right customers holding the
        does,” says Debbie Jones, branch sales manager.            right card,” Brothers-Bridge recalls of the initiative,
          In one particular instance, an elderly customer          which began roughly two and a half years ago. “We
        fell ill and was hospitalized across the border in         wanted to make sure our customers had the card
        Canada. The customer needed a new debit card,              that was going to work best for them.”
        so McGill ordered a new card for the customer                 She says ICBA Bancard staff also helped with the
        and, on her own time, went through the time-               analysis and made several recommendations. Under

 64 IndependentBanker 02|2007
her direction, German American introduced a             misgivings, she answered a help-wanted ad from
platinum credit card that was “well-received,” in the   First Merchants Bank in Muncie, Ind. Two decades
modest bank executive’s opinion.                        later, Brothers-Bridge is still in the industry;
   German American President Ken Sendelweck is          something for which her colleagues at German
more enthusiastic in describing the bank’s new          American are grateful.
platinum credit card as well as Brothers-Bridge’s im-       “Her energy and enthusiasm really lit a fire under
pact on German American’s total credit card line.       all of us!” Sendelweck adds. ib
  “In terms of that product niche, she’s almost                                              —Blair Walker
doubled outstanding credit
card balances in the last three
to four years,” Sendelweck
says. “Tonya’s energy and
enthusiasm have really been a
catalyst for our front-line sales
people. She’s kept the product
out in front of them and has
been very instrument al in
terms of portraying the fea-
tures and benefits of what our
clients should see in a Ger-
man American credit card.”
    One reason the platinum
card rollout did well is
because Brothers-Bridge
refused to let herself or her
team view the product just as a
potential money-maker. “If
banks are considering offering
credit cards, they have to look
beyond strictly dollars and
cents,” she says. “They have to
look at some of the intangible
benefits, such as clients having
your brand in their wallet.
That gives a bank another
touch point, or product or
service that ties the customer
to you.”
    Brothers-Bridge also sug-
gests that banks introducing
new credit cards make the
process a collaborative one
within       all    facets     of
management. “Hearing others’
perspectives brings out things
that you wouldn’t have
thought of,” she says.
    The Farmland, Ind. native
started her banking career in
1987. Despite her initial

                                                                                           02|2007 IndependentBanker 65

To top