Tag: bank regulation

First Reliance Bank’s founder and CEO Rick Saunders with his wife, Tiffany, and three children

To help ease the process, First Reliance Bank offers assistance for associates who welcome a foster or adopted child into their family.

By Rachel Hatcher

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The road for couples and families looking to adopt is littered with hurdles. Maybe they’re still saving up to accommodate the costs, or their employer isn’t willing to provide the time off necessary for a child to adjust to their new home.

First Reliance Bank, a $925 million-asset community bank in Florence, S.C., has made strides to break down these barriers.

According to the national nonprofit Dave Thomas Foundation for Adoption, finances are a concern for 54% of adults considering adoption from foster care and 76% for international adoption. To ease concerns like this for their employees, First Reliance Bank established its Adoption Assistance Policy, which provides financial reimbursement for adopting families.

The community bank grants program participants up to $14,500, which can go towards adoption expenses such as public and private adoption agency fees, legal fees, medical and travel expenses, and other associated costs. In addition, FRB provides eight weeks of paid leave. If an employee is new to adoption, founder and CEO Rick Saunders and his wife, Tiffany, make themselves available to offer advice.

A personal connection

Saunders is a strong advocate for adoption, having personally experienced the process. After Tiffany experienced three miscarriages, she and Saunders decided to adopt a child. However, after they had begun the process of adopting a little girl in 2003, they discovered Tiffany was pregnant. Despite that, Saunders and his wife chose to go through with the adoption.

“We just were already in love with her,” says Saunders. “We already had her pictures.” Their daughter became the namesake for the community bank’s additional financial adoption resource, Reagan’s Promise Fund, which is funded by employee contributions and profits from branded product sales.

Saunders takes pride in First Reliance Bank’s adoption benefits. “Anytime the company can help the people who work for them chase their passions, their love for life and family and their work—I just think it creates a culture and an environment where people love being there, and they’re not just chasing the dollar.”

As a testament to the community bank’s dedication, the Dave Thomas Foundation for Adoption recently recognized First Reliance Bank in its 100 Best Adoption-Friendly Workplaces.

Encouraging community

Adoption can be a difficult journey, but it proved life-changing for Saunders’ family. When he and his wife brought Reagan home, she struggled with health issues brought on by mistreatment within the system. Yet in a short time, they saw a huge change in her. “You could see the changes mentally, emotionally and physically in her just in a few weeks,” Saunders says, “and it was a completely new life for her.”

Even with doctors’ predictions that Reagan would struggle with memory retention, she is now 20 years old and a Dean’s List student at her college. Saunders and his wife later went on to adopt another daughter, 14-year-old Riley.

“I do think our people are really highly engaged, and a lot of that has to do with programs like this that say, ‘My employer cares enough about family and about the people who work here that this is the kind of place I want to work.”
—Rick Saunders, First Reliance Bank

Saunders hopes the community bank’s program will encourage employees to pursue adoption and make a difference in a child’s life. He says one to two bank associates take advantage of the adoption benefits every year, but many others appreciate the sentiment and support that the program offers.

“My First Reliance family provides me the flexibility to care for my family and the children I take into my care,” says one employee who fosters and adopts. “Being a working mother is a challenge, but at First Reliance, I truly feel respected for what my husband and I try to do for these children.”

Saunders also believes that accommodating adopting families should be the norm. He says, “I do think our people are really highly engaged, and a lot of that has to do with programs like this that say, ‘My employer cares enough about family and about the people who work here that this is the kind of place I want to work.’”

But his reasoning for the program goes beyond just the positive effect it has on his bank. “Anybody who can help family, be a part of that and build their own families,” he says, “I think it’s a good thing for our world, and it’s a good thing for our country.”

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Rachel Hatcher is assistant editor of Independent Banker.

Photo by Nebojsa/Adobe

By Lindsay LaNore, ICBA

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In a rapidly evolving world, it’s more important than ever to commit to lifelong learning, but it’s just as challenging to make time for it. Expanding education beyond the classroom, however, can be as easy as planning a reading list, starting a departmental book club or gifting each member of your team a book that you love.

If you’re not sure where to start, here are some great suggestions from members of the ICBA Bank Education Committee.

1. The Fred Factor, Mark Sanborn: The most recommended book on this list, The Fred Factor uses the true story of a community-minded mail carrier to educate readers on making a real difference every day and building strong relationships.
2. The Five Dysfunctions of a Team, Patrick Lencioni: Told from the perspective of a CEO whose team’s dysfunction threatens to bring her company down, this fable reveals why teams frequently struggle and often fail—with advice on how to avoid it.
3. Becoming a Person of Influence, John C. Maxwell and Jim Dornan: A must-read, this classic work teaches readers how to interact more effectively with others, whether you’re a bank leader or a parent.
4. The Advantage, Patrick Lencioni: Lencioni was a popular choice for this list, and this work on organizational health is recommended as a great group read for leadership teams.
5. The Speed of Trust, Stephen M. R. Covey: It will come as no surprise that trust is essential to a successful business, but this book argues it’s a key competency in our global economy, with advice on how to grow it.
6. Great Leaders Grow, Ken Blanchard and Mark Miller: This recommended read advocates that personal growth is critical to leadership success and offers help designing a unique growth plan.
7. Results That Last, Quint Studer: It may have been written for the medical profession, but one of our members loved this book so much, he asks every new team member to read it.
8. The Go-Giver Leader, Bob Burg and John David Mann: A parable about a chair manufacturer forced to modernize to survive, this was chosen as an end-of-year gift for all supervisors at one of our member banks.
9. Make Your Bed, William H. McRaven: Written by an admiral who trained as a Navy SEAL, this intriguingly titled book shares principles gleaned in basic training that can change the way we work.
10. Thank You for Being Late, Thomas L. Friedman: A much-lauded guide to overcoming stress while surrounded by accelerations in technology, globalization and the environment, this is another must-read, if only to find out what the title means!

With thanks to Shane Pilarski, Aaron Panton, Brenda Foster, Martha Haymaker, Jason Jones, Josh Pape, Noah Wilcox, Frankie Cole and Emily Mays for their contributions.

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Lindsay LaNore (lindsay.lanore@icba.org) is ICBA’s group executive vice president and chief learning and experience officer

Photo by Pressmaster/Adobe

The skills needed to succeed in the workplace are changing, with companies placing greater value on soft skills like communication and leadership. In response, community banks have an opportunity to revisit hiring policies and training programs.

By Roshan McArthur

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The use of digital technology and artificial intelligence has changed the workplace dramatically in recent decades, but the pandemic accelerated this shift by forcing remote working and driving online commerce. As a result, the skills needed in all businesses, community banks included, are changing.

According to an analysis by McKinsey Global Institute, the need for manual skills and basic cognitive skills is declining due to increased automation, while the demand for what used to be called “soft skills” is on the rise.

Soft skills are personal attributes, not traditionally taught but often picked up in the workplace, that allow employees to interact well with others, both socially and emotionally. But, according to ICBA’s chief learning and experience officer Lindsay LaNore, there’s really nothing all that “soft” about them. And that’s why professionals in the learning and development space are increasingly referring to them as “power skills.”

Power skills, in essence, are those that can’t be replaced by artificial intelligence. So, employees increasingly will need skills that set them apart from machines but also work well in the digital era and help them adapt to new ways of working.

A compassionate approach

Kirsti Coghlan, director of human resources at $600 million-asset Mauch Chunk Trust Company (MCT) in Jim Thorpe, Pa., learned the value of skills like these during the pandemic. In the past, she says, the community bank’s recruitment strategies typically relied heavily on traditional banking experience, with an emphasis on the candidate’s ability to sell. When COVID hit, that changed radically.

The bank found itself accepting applications from nurses, certified nurse aides and home healthcare aides, all of whom were looking for new career opportunities.

“Healthcare workers have the ability to triage intuitively,” Coghlan says. “They would utilize their caregiver personalities, and that parlayed into behaviors for the customer service experience.”

The caregivers’ ability to empathize with customers turned out to be a boon for MCT, especially when dealing with emotionally difficult issues. “We’ve seen an amazing uptick in fraud,” she adds. “So, the patience a caregiver would have to sit with someone who’s experiencing issues and work through those dynamics, that’s a different personality set, or critical skill set, than you would have in a traditional banker.

“The traditional banker might say, ‘OK, let’s close your checking account down, let’s suspend your debit and credit cards.’ The caregiver is going to say, ‘This must be devastating for you. How can we further support the family?’ Coghlan continues. “Being a community bank, our customers are our neighbors. So, we need to be cognizant of what else we can do to support them, other than the mechanical step A, step B, step C.”

This led to MCT launching new training initiatives. If candidates didn’t come from a traditional banking background, the community bank knew it needed to provide a solid knowledge base for them, while thinking more creatively about its leadership development and career ladder opportunities. As a result, it now provides progressive advancement levels within multiple departments, creating cross-functional opportunities and expanding employees’ knowledge base by tapping into their critical thinking skills.

The ability to think critically and use intuition comes into play when identifying fraud, a skill set Coghlan believes goes beyond the required training on topics like phishing scams, and one that’s essential for future-proofing banks and their customers. That critical skill set, she explains, helps bankers ask questions, “while not being nosy, not being belligerent, not being intrusive, but being savvy enough to think, ‘Wait a minute, that’s not a typical transaction for you, let’s investigate this a little bit further.’”

Coghlan encourages other bank leaders to follow suit by tapping into skill sets from other industries and to reexamine “the preset notion that you have to have preexisting banking experience.”

“You still need the ability to crunch numbers, you still need to have your basic credits and debits, or your accounting basics, but that can be taught,” she says. “With the market the way it is, I would say, broaden this perspective, take off the traditional blinders, and take a look at things that may come as a surprise.”

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Roshan McArthur is a writer in California.

Illustration by Monster Ztudio/Adobe

From new fee practices to peer-to-peer fraud, keep an eye on what regulatory changes could be developing in the new year.

By Mary Thorson Wright

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While the pace of bank regulatory changes has diminished from a few years ago, several issues will either become effective or likely develop in 2023. Community banks must continue to stay focused on regulatory discussions and remain nimble to respond to proposals and address requirements quickly and accurately. Let’s look first at changes for the coming year that were projected at the time of this writing.

Projected changes

Deposit insurance. The FDIC approved a final rule to increase initial base deposit insurance assessment rates by 2 basis points until the Deposit Insurance Fund (DIF) achieves the FDIC’s long-term goal of a reserve ratio of 2% of insured deposits. The revised rate schedules will be effective Jan. 1, and applicable to the first quarterly assessment period of 2023 with an invoice payment date of June 30, 2023.

Multiple re-presentment fees. The FDIC issued guidance about the consumer compliance risks associated with assessing NSF arising from the re-presentment of the same unpaid transaction. It cites potential violations of Section 5 of the Federal Trade Commission (FTC) Act, which prohibits unfair or deceptive acts or practices and potential risks arising from arrangements with third parties, and it directly applies to FDIC-supervised financial institutions. Full implementation may be delayed based on questions about clarity of disclosures and whether corrective lookbacks and restitution would be required.

Debit card interchange fees and routing. The Federal Reserve Board finalized updates to the board’s rule for debit card transactions. It becomes effective July 1, 2023, and requires debit card issuers to provide two unaffiliated payment networks enabled for card-not-present (CNP) transactions.

Disclosed bank fees on deposit items. CFPB issued Circular 2022-06 about two fee practices that it considers unfair and unlawful under existing law. The practices targeted include surprise overdraft fees and check depositor fees.

Evolving risks

Community banks should keep an eye on evolving risks and emerging threats in 2023, including these:

Small business data. According to a court filing in California, the CFPB plans to issue a final rule implementing Dodd-Frank Section 1071 small business (generally, those with gross annual revenues of less than $5 million) reporting requirements by March 31, 2023. It proposes to nearly double the number of data points required to be collected on small business loans, including information about race and demographics, and covers all banks making more than 25 small business loans annually. Finalization is expected as early as 2023.

CRA. On May 5, 2022, the federal bank regulators jointly released a notice of proposed rulemaking (NPR) to strengthen and modernize the Community Reinvestment Act (CRA) regulations. The proposal would increase small bank asset thresholds and create a new framework for evaluating large and intermediate banks. A final rule is expected in 2023.

“Looking at the CFPB’s regulatory agenda, it is likely we will continue to see the CFPB taking actions using novel tools, like interpretive rules, advisory opinions and circulars, rather than formal rule changes.”
—Michael Emancipator, ICBA

Cyber reporting. Cyber Incident Reporting for Critical Infrastructure Act of 2022 (CIRCIA) was passed in 2022. The law will require all critical infrastructure entities to report cyber incidents to Cybersecurity and Infrastructure Security Agency (CISA) within 72 hours from the time the entity reasonably believes the incident occurred and ransomware payments to CISA within 24 hours of payment. An NPR is due in 2024 or before.

Data privacy. Comprehensive data privacy laws remain a hot topic for state legislatures, with a number of states following California’s lead and passing their own version of the California Consumer Privacy Act. In 2022, the House Energy and Commerce Committee passed a national data privacy bill, but the bill did not receive a vote on the House floor. Interest at the state and national level is expected to continue in 2023.

Climate-related risk. In the past year, the OCC and FDIC published draft principles for climate-related financial risk management for large banks, and the SEC published a proposed rule governing the enhancement and standardization of climate disclosures for investors. The agencies are likely to take steps to finalize these proposals in 2023. While much of the regulatory climate-risk agenda remains focused on the nation’s largest banks, ICBA continues to make the community-bank perspective heard by advocating that these policies should not trickle down to community banks.

Peer-to-peer fraud. This area could evolve rapidly. According to Rhonda R. Whitley, ICBA vice president and regulatory counsel, “At this time, the CFPB has not initiated action; however, it is possible that it could revise Regulation E for banks’ liability for the fraudulent transactions due to the nature and growing scale of occurrences.”

It’s important for community banks to monitor all types of regulatory communications. “Looking at the CFPB’s regulatory agenda, it is likely we will continue to see the CFPB taking actions using novel tools, like interpretive rules, advisory opinions and circulars, rather than formal rule changes,” advises Michael Emancipator, ICBA vice president and regulatory counsel.

In 2023, community banks should stay engaged to adjust program requirements to align with regulatory expectations and to take steps to strengthen the risk governance framework.

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Mary Thorson Wright is a writer in Virginia.

Illustration by Jack Hudson

We recently spoke with community bank CEOs from across the country to gain insights on how they’re proactively positioning to manage risks and take advantage of growth opportunities in the coming year.

By Beth Mattson-Teig

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Following some respite in 2022, community bankers are bracing for a tougher economic landscape ahead in 2023. One of the biggest challenges is simply navigating market uncertainty related to Federal Reserve policy and the direction of the economy. If a recession does emerge, what will it look like? What sectors will be most negatively affected, and which could skate through relatively unscathed? CEOs also see opportunities to increase revenues and net interest margin in the rising rate environment.

Q: What will be your community bank’s greatest business challenge in 2023, and how are you preparing for it?

Koger Propst: The biggest challenges are managing the impact of the economy and the rising rate environment on deposits, credit quality and net interest margin. Our bank is built on a low to moderate risk profile. We aggressively seek out low-cost deposits through a value proposition built on more than rates and have also built our loan portfolio with the same low to moderate risk profile. Building a defensive balance sheet and maintaining our low to moderate risk profile is the key to managing through the upcoming challenges. Clearly, thoughtful actions will be required in the coming year, but our proactive positioning is the foundation.

William West: In a macro sense, we’re just trying to read the tea leaves in terms of what’s happening in the economic landscape that will affect our bank. Is loan demand going to be tepid? Are we going to have a recession? Those are the things that we’re trying to figure out how to read as we put our 2023 budget together. We’re cautiously optimistic about 2023. We think it’s going to be a fairly good year for banks, but it’s a challenge for us to get it right.

Jill Sung: We don’t know when the Fed is going to stop raising rates, or whether we’re going to have a recession. We’re constantly adapting, trying to strategically figure out what to do, but information keeps shifting. So we’re being conservative. We’re assuming that the interest rate will be elevated in the next six to nine months and not assuming that in five months the Fed will drop the rate. We’re assuming that there will be a drawback of economic activity. So we’re careful when we lend out commercial real estate loans. We’re looking at the [property] income, and we’re not assuming that rent can be raised freely these next 12 months.

“Going into a recession can sometimes be a good time to gain new customers, because you’re seeing them through good and bad times.”
—Anita Drentlaw, New Market Bank

James Sills: Talent and retention of talent is our number one strategic priority in 2023. We have really struggled over the last 18 months to hire certain types of banking professionals. All our locations are in urban areas of North Carolina, and we’re going up against the biggest institutions to attract talent. We’re using executive recruiters, we’re leveraging LinkedIn, and we have increased the amount of bonuses on referrals from $500 to $1,000. We talk about it at our senior staff meetings and weekly calls. It is top of mind in terms of what we’re doing, because it is critical to get people with the right talent and the right experience.

“I’m excited going into 2023, because we have the capital to do more and make a difference in the communities that we serve.”
—James Sills, M&F Bank

Q: What do you see as your bank’s greatest business opportunity in 2023, and what steps are you taking to make the most of it?

Anita Drentlaw: We hired another commercial lender in August. Having him on board is going to be a great opportunity for us to continue to do more outreach in the community and get to know more small businesses. The three lenders that we have were about at capacity for what they could do in terms of bringing in new business. Going into a recession can sometimes be a good time to gain new customers, because you’re seeing them through good and bad times. There’s also been a lot of consolidation of financial institutions in our area. So, we see an opportunity to talk with businesses and convey some of the differences in working with a community bank versus the larger institutions.

T. Corey Neil: For us, it’s digital. Due to behavior change throughout the pandemic, we now have a client base that is much more adaptive to how they interact with us. We see incredible opportunity to take advantage of that behavioral shift to invest in digital platforms to take our digital capabilities to another level. That means being able to do business with us at any time and anywhere, and not being restricted to our hours or our manpower.

Sills: Our bank has about $100 million in new capital. We received $80 million in ECIP [Emergency Capital Investment Program] funding through the U.S. Treasury, which will allow our bank to grow to over $1 billion in total assets. This is a transformational opportunity to grow our bank, which is the second oldest African American-owned bank in the United States. We’re gearing up for this challenge by investing in technology, developing new products, doing more marketing, optimizing our branches and also looking at some M&A opportunities. I’m excited going into 2023, because we have the capital to do more and make a difference in the communities that we serve.

Q: Does your bank plan to open any new line of business in 2023? If so, what is it, and what is driving that opportunity?

Sills: We are currently an SBA 7(a) lender, and we participated in the PPP program in 2020 and 2021. We did about 850 loans for $50 million in 81 different markets [in North Carolina]. What we’re planning to do is scale up our SBA 7(a) line of business, and we’re in the process of trying to build out a dedicated SBA team to do that for us.

Neil: One thing that is opportunistic for us is the residential mortgage space. While we have done residential mortgage portfolio loans that we keep on our books, we have not had the capability to offer a 30-year fixed rate to a client that has access to the secondary market. Historically, we have directed those opportunities out to brokers and others. So we are developing a Fannie Mae/Freddie Mac capable product that can go 30-year fixed rate that we would ultimately originate and sell, which would generate fee income for us, and more importantly, not send a client to someone else to solve for their need.

Q: Which revenue streams are likely to drive the most profitability for your bank in 2023?

Neil: By all means, loans. We have a 50% loan-to-deposit ratio. We would love for that to be 75%, but we’re not going to take undue risk to get there. We are sticking to our knitting in the types of loans and relationships we’re looking for, but with interest rates moving in a direction that gets us back to a reasonable margin, the loan business is where most of our focus is.

Drentlaw: With the higher interest rates, variable rate loans have become more profitable. The residential mortgage business has been tougher in 2022. If rates start to drop at the end of 2023 or into 2024, I think there are many people who probably will be eligible for refi business. It’s hard to say when rates will move lower, but that is an area where we are going to try to maximize profitability. I do think 2023 is going to be tough from a profitability standpoint, and a harder year than what we’ve been used to in the last couple of years.

Sung: We are structuring our deposit-side products better to be able to bundle things together so that it is easier for our staff and easier for our customers to see it as a package versus à la carte, which we always have as an option. Through that bundled packaging, we would be trying to create these products that slowly move up the financial food chain to get customers and the underbanked more and more into the financial banking system.

Q: What new technology is your bank planning to invest in during 2023?

West: We have a major initiative to significantly improve our digital delivery system. We’re about to launch our loan automation, which will be our 2023 project. On the heels of that, we’re going to build a new digital banking platform and data warehouse. Those are projects that we will start using between the end of 2023 and the first quarter of 2024. It’s a major undertaking for a bank of our size. Our best guess is that over the next four years, we’ll spend $12 million to do this, and the goal is to make it extremely easy to do business from a customer’s point of view. We will be able to use the data we already have with our clients to anticipate future needs and to make it easier for them when they do have to apply if we already have information. Internally, we expect to get some significant efficiencies in the way that we do business.

Drentlaw: We signed with Teslar Software in late December 2021 and have been working with them to implement workflows and exception tracking. We contracted for their whole suite of products. So, as we continue to grow the relationship, I can see us diving in and using that technology in more areas of the bank as opposed to just credit administration. That will bring more efficiencies and allow us to grow our asset size, but not necessarily have to hire additional people. It also will help us provide better service to our customers with more consistency regardless of who they’re talking to or what branch they’re visiting.

Sills: Next year, we’re going to be implementing a new cloud-based loan origination system, which will make us more efficient and allow us to increase the loan volume. It has a lot of automation, AI and workflow built into it, and it will provide a better customer experience and a better lender experience. It is tailored to commercial loans, but we will be able to process consumer loans on the platform as well. So I’m super excited about this particular investment.

“We … have to focus on making sure our people believe that this is a place where they can grow and get opportunities.
—Jill Sung, Abacus Federal Savings Bank

Q: When it comes to talent management, what is your biggest area of focus likely to be in 2023, and how is your bank planning to address it?

Propst: We have had pretty good success building and retaining our teams through the Great Resignation. Having said that, our entry-level hiring was the most challenging. We have already seen some relief in that area and expect that 2023 will provide more opportunity. Our goal in the coming year is to be more opportunistic and focus on hiring when the right talent is available, versus waiting until we have a need.

Neil: We’re investing in the change management that will be necessary to absorb our ongoing investment in digital. We have to get our teams ready to approach their work in a different way and do their work with different tools. We need to win the hearts and minds that this is great for our clients and all of us. So our attention will be getting our whole organization ready for that new digital system.

Sung: Operationally, we’re dealing with a lot of turnover right now. As a small bank, our main competitors in the labor market are huge banks and institutions, and it’s hard for us to compete against that. What we’ve been doing is really digging in to find and eliminate all the excesses in our processes. People do things that you don’t need to do. Then we need to look at technology in our platform that we can use to be more efficient. We also have to focus on making sure our people believe that this is a place where they can grow and get opportunities. We really have to build loyalty and a sense of belonging. Our focus will be to convince these younger people that you don’t have to hop around. In order to do that, we have to be appealing to them so they want to be here.

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Beth Mattson-Teig is a writer in Minnesota.

Elder financial abuse costs seniors billions of dollars a year. But there are tools to fight it. Photo courtesy of CRA Partners/SHCPF

Billions of dollars are lost to elder financial exploitation each year. Equip your team with the skills needed to protect your customers.

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From 2019 to 2020 alone, the amount of money involved in elder financial abuse rose by nearly a billion dollars—the largest year-over-year increase since 2013. But that most likely doesn’t account for all the money lost in that time.

“Most times, elder financial abuse goes unreported or underreported, either because the seniors are overwhelmed or are somewhat embarrassed,” says David Lenoir, president and CEO of CRA Partners’ Senior Housing Crime Prevention Foundation (SHCPF), an ICBA subsidiary. “So while the numbers are staggering, at the same time, we think it’s just a small fragment of what is actually going on related to elder financial abuse.”

Community banks can help prevent, identify and report financial elder abuse.

A number of ICBA solutions provide community bankers with the tools they need to assist customers who may be experiencing financial exploitation.

ICBA Community Banker University courses

The online training course Elder Financial Abuse is available through all Community Banker University training plans but can also be purchased separately. By the end of the course, participants should have a better understanding of:

• How to define, recognize and identify financial elder abuse
• The potential perpetrators and causes behind elder financial abuse
• How to respond to elder financial abuse
• What can be done to prevent it in the future

CRA Partners

Powered by the Senior Housing Crime Prevention Foundation, CRA Partners’ multipronged compliance program provides resources for community bankers that benefits them and their communities.

The first prong provides education not only to bankers but to senior citizens and their families as well.

“We have other components around that, just in terms of protecting the seniors who live in nursing homes and assisted living facilities,” Lenoir says. “We launched recently some printed material—we call it Cyber-Savvy Seniors—where a bank can co-brand our literature with its logo, and also a senior facility can co-brand with its logo.”

While some of the advice may seem like common sense to those of younger generations, Lenoir says, it’s important to help senior citizens recognize the need for education on tactics like complex passwords and multifactor authentication.

To assist in this, some of the resources provided by the program include educational materials for bankers and community members on financial elder abuse; a press kit, attendee handouts and bank training handouts; and an online community seminar.

In addition, community bankers who use the program can choose a senior facility, like a nursing home or HUD housing facility, to provide the online community seminar to. By participating in the program, bankers are eligible for CRA credit.

AARP BankSafe Training Platform

This online training platform was created in collaboration with more than 2,000 industry professionals in an effort to combat elder financial exploitation. Through videos, learning modules, games, quizzes and more, participants can learn about financial exploitation at their own pace.

The program aims to help bankers improve their knowledge of:

• The impact of financial exploitation on your customers and community bank
• What actions to take to identify and prevent financial exploitation
• State-specific reporting requirements

According to the National Adult Protection Services Association, only one in 44 elder financial abuse cases gets reported, making it even more important for community bankers to learn to recognize red flags and address them properly for the benefit of the bank itself and its customers.

—Tiffany Lukk

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Image by Worawut/Adobe

By Charles Potts

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As we turn the page to a new year, the innovation evolution continues. ICBA is leaning into it, bringing its ThinkTECH Accelerator program and innovation efforts in-house to provide community bankers with targeted solutions.

Here at ICBA, we’ve been tossing around a quote from author Courtney C. Stevens’ novel, The Lies About Truth, that captures our ethos heading into 2023: “If nothing changes, nothing changes. If you keep doing what you’re doing, you’re going to keep getting what you’re getting. You want change, make some.”

I believe 2023 will continue our industry’s forward momentum as our members position themselves to be the agents of change that find and champion new opportunities.

Here are what I believe will be the top five opportunities this year:

1. Targeted fintech initiatives focused on meeting community bankers’ unique needs. Much like we saw with some concentrated initiatives in 2020 with the Paycheck Protection Program (PPP) and the CARES Act, 2023 will bring a more granular focus to community banks’ lines of business. Agtech, age tech, payments and financial inclusion are top of mind for ICBA, as well as revenue-generating opportunities for community banks.
2. Momentum around faster payments, real-time payments and FedNow. Faster and real-time payments activity and deliverables will become tangible and imperative in the year ahead. With the launch of FedNow this year, new use cases for faster and real-time payments will continue to emerge, providing community banks with a groundswell of opportunities.
3. Continuing digital transformation. Digital transformation shows no signs of slowing down. In response, ICBA is expanding its digital education programming and resources to ensure community bankers have what they need to differentiate themselves from the competition and vie for market share. By bringing its innovation initiatives in-house, ICBA will continue to support these efforts, including identifying robust, cutting-edge solutions to solve community bank pain points and meet evolving customer needs.
4. An increase in embedded payment. Embedded finance is expected to increase exponentially over the next few years, opening up new markets and enhancing customer experiences. According to Plaid, a financial services company, embedded financial services will produce $320 billion in revenues in 2025—a 10-fold increase over the $22.5 billion in 2020 revenues. Expect increased demands from business customers and new revenue-generating opportunities for community banks.
5. The emergence of chief innovation officers or digital strategists. With growing talent demands and the pace of innovation, expect to see the emergence of in-house community bank chief innovation officers and digital strategists. Community banks are investing in these new skill sets, bringing in top talent from other industries, so we expect to see an uptick in this trend in the year ahead.

In 2023, community banks must remain agile and focused on making change to secure their place as their customers’ preferred financial partner. As the new year unfolds, we would do well to remember Stevens’ mantra, “If nothing changes, nothing changes.”

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Charles Potts (charles.potts@icba.org) is ICBA executive vice president and chief innovation officer

How we hire, retain, recruit and advance our missions amid momentous change will remain a key topic for community bank leaders and will influence our plans for the future.

December creates a natural opportunity for reflection, and as I look back on our efforts over the past year, I’m struck by one core truth: It’s the people who make the bank.

This month’s issue focuses on the best banks to work for, because community banking is about so much more than transactions. It is made up of the spirit of community, deep and personal relationships, and customer trust. Our people—committed, connected, caring—continue to differentiate us as community banks and keep our organization relationship-first and mission-centric.

As we grow and respond to today’s environment, one of our greatest challenges and opportunities is cultivating the next generation of leaders. As hiring organizations, we are looking for skill sets that extend beyond technical knowledge to a values-based ideology that prioritizes personal relationships, customer service and community. We are relationship businesses that are looking for professional relationship builders.

Thankfully, in this digital landscape, we have more opportunity than ever to cultivate the exact talent we need. While many positions remain vital on an in-person level, some roles allow for off-site work options, meaning that you now have a larger applicant pool at your disposal. You can remotely engage a tenured community banking professional to complement your team on the ground. You can expand your search for positions that are hard to source in your market, or look for expertise in particular technical skill sets. You can broaden your ability to hire the best and brightest staff both in market and out.

This month’s issue touches on these trends, how community banks continue to excel as employers and what you can do to ensure you achieve and retain that position. I hope that as you read these stories, you’re struck—as I was—by the importance of the people who make community banks what they are, and the cascading impact they have on one another, customers and communities.

How we hire, retain, recruit and advance our missions amid momentous change will remain a key topic for community bank leaders and will influence our plans for the future. But as the year closes, now is the time to take a collective breath, celebrate our successes and recharge, so that come Jan. 2, we’re renewed, ready to write our next chapters and fully prepared to embrace new possibilities.

In that spirit, on behalf of the entire team at ICBA, I wish you a very happy holiday season and new year!

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Rebeca Romero Rainey
President and CEO, ICBA
Connect with Rebeca @romerorainey

People want to be a part of something bigger than themselves, and community banks provide that opportunity.

Community banking is about serving the greater good. As community continuators, we are part of something bigger than ourselves. We support civic clubs, Lions Clubs, the Relay for Life, our local schools and so much more, because these issues matter to the communities we serve.

Month after month, we’re called to support any number of great causes, and we step up to the plate, because community bankers embody what it means to operate in a culture of service.

Thankfully, this give-back philosophy helps drive employee engagement and loyalty. People want to be a part of something bigger than themselves, and community banks provide that opportunity. We not only encourage but expect our team members to be out in the community, serving on boards, civic clubs and even in city government. There is no one better to help lead a community than those who know it best: its local community bankers.

So, as we read this month’s issue featuring the best community banks to work for, keep in mind that the common thread among each of these unique stories is that they are community banks that lead with a spirit of service. Their approaches look different because their communities are different, but at their core, each one has a servant’s heart, one that extends to their employees. Their culture of service is what attracts employees to them, and in turn, ensures that they have engaged, enthusiastic teams.

As we close out the year, I hope we’ll all take the time to be thankful that we work in the best industry on earth. Community bankers from every level of the organization carry the title of a protector of Main Street, serving small business owners, farmers, community leaders and consumers to the best of our ability every day. Any time you come across a local event in your community, I guarantee you will see a local community bank behind it all, and that is what makes me so proud to be a community banker.

We community bankers are one huge family serving millions of customers across this country. What we collectively achieve together we could never do alone, and I am so thankful for that. It is an honor to serve alongside all of you and tell our stories together.

I wish everyone a merry Christmas and a prosperous 2023. This year has brought us much success; let us never forget where our blessings originate.

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Brad Bolton, Chairman, ICBA
Brad Bolton is president and CEO of Community Spirit Bank in Red Bay, Ala.
Connect with Brad @BradMBolton

Artwork by ra2 studio/Adobe

Convenience is a growing desire from consumers everywhere. Across the world, people are using super apps to send messages, purchase tickets and, of course, bank online. What are they, and how can community banks stay on top of this trend?

By Colleen Morrison

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Super apps, or apps that aggregate online or mobile user experiences into one central location, have taken off globally. WeChat, a Chinese mobile messaging app that offers voice, text and group messaging; payments; games and more, boasts 1.29 billion users. India’s Paytm—advertised as a payments app that also allows consumers and merchants to pay bills, book flights and movie tickets, open a savings account, invest in stocks and mutual funds, acquire loans and beyond—reports 300 million users.

And now the trend is gaining traction in the U.S. According to a recent PYMNTS report, 72% of consumers have indicated their interest in a super app offering.

These aggregators have piqued consumer interest and grown exponentially around the globe precisely because they provide what users want: convenience. When asked about the benefits of a super app, 66% of consumers noted convenience as a top advantage, with another 54% emphasizing the apps’ ability to coordinate disparate topical areas, says the PYMNTS report.

But with these benefits come newfound threats, chiefly in the form of data privacy and security. While nearly 40% of consumers also have concerns about the amount of data they might have to share with a super app, overall, they feel the benefits outweigh those concerns: 70% of those who are highly interested in using a super app indicate that the advantages are worth the risk of revealing personal data.

“Keep your priorities in your app focused on banking. People will still come to your app when they know that they’re dealing directly with you for banking needs.”
—Jordan Hirschfield, Mercator Advisory Group

Community bank considerations

So, what does this intersection of regulation and technology competition mean for community banks? For starters, they will need to institute a strategy for managing the emergence of super apps. From head-to-head competition to embedded finance, how community banks respond should align with their individual business strategies.

“Keep it straight and to the point in your banking app,” advises Jordan Hirschfield, director, prepaid advisory services at Mercator Advisory Group. “Partner so you can have access to an Apple Wallet, a Google Wallet, PayPal, Amazon, whatever it may be, and then keep your priorities in your app focused on banking. People will still come to your app when they know that they’re dealing directly with you for banking needs.”

In addition, community banks need to evaluate their partnerships with fintechs and other third parties. When customer data is shared, those integrations must be met with an elevated level of scrutiny and a thorough understanding of data protections.

“Partnering with fintechs and new entrants can offer useful means to bring new products to market, but community banks should recognize that these new technologies may introduce new risks to consumers,” says a CFPB spokesperson. “It is important that community banks understand how consumer data may be captured through app usage, and that they provide as much insight and transparency as possible to their customers around the potential instances where data may or may not be captured.”

Despite this new form of competition and the responsibilities it introduces, community banks may have an opportunity to emphasize the unique services they provide. Super apps create an environment for community banks to emphasize where they excel: in safety, security and banking relationships. Consumers already trust their banks more than tech giants, and that trust will offer a key differentiator during the rise of the super app.

In addition, the ability for consumers to connect with someone they know still takes top billing: 42% of consumers between the ages of 21 and 55 say they would leave their bank if it eliminated account manager support. In short, the personal relationship matters.

“The key word is relationship—that is the secret sauce of the community bank,” says Hirschfield. “For a community bank, it’s showing that the digital world is just a segment of the value that they can produce.”

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Colleen Morrison is a writer in Maryland.

Photo by goir/Adobe

The end of the year is the perfect time to share your appreciation for the hard work and successes of the year gone by.

By Lindsay LaNore, ICBA

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It’s the end of the year, a time for leaders to reflect on goals, metrics and performance over the past 12 months. It’s a time to set goals and a vision for the year ahead. And it’s also a perfect time to say, “thank you,” and share your appreciation for all the hard work and successes of the year gone by.

A lot has been written recently about the power of gratitude, with studies showing that appreciation is not only great for team morale; it also gives a boost to the person expressing it. The greatest thing about saying “thank you” is that it’s easy. It’s a very effective way of making your team feel appreciated and happy in their roles. And, while this shouldn’t be the sole motivating factor, employees who feel appreciated are willing to work harder.

In the workplace, saying “thank you” can take all kinds of forms. It can be an email from the CEO to all staff, or from a department leader to their team. It might come in the form of a letter or note, a special lunch, a party, a call-out at a team meeting or a small gift. There is no need to be extravagant, but it should come from the heart.

Will Guidara, restaurateur and author of Unreasonable Hospitality: The Remarkable Power of Giving People More Than They Expect, is passionate about the power of putting people first. In a recent TED Talk, he told the story of four foodies who were on vacation in New York sampling the best restaurants, including his. Between courses, however, they expressed regret that they were about to head for the airport and hadn’t tried a simple New York City hot dog. He ran out to get them one on the spot. It cost him $2, but the experience delighted his customers and highlighted to him how important it was to make people feel seen.

Guidara suggests to leaders in all industries that they slow down, be present, listen to the people around them and give them a sense of belonging. Treating everyone as an individual is paramount, and that means choosing gifts or experiences that are unique to them.

Great ways of showing appreciation include celebrating specific achievements or actions and highlighting ways in which employees exemplify the bank’s values. Recognize hard work with a small thank-you gift or even a handwritten note, but make sure it’s tailored to suit the recipient, whether it’s a box of chocolates you know they have a weakness for, a gift card to a favorite restaurant that’s a little out of reach financially, or a few extra hours off to watch their child’s holiday performance.

Saying thank you may be easy, but doing it well is an art.

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Lindsay LaNore (lindsay.lanore@icba.org) is ICBA’s group executive vice president and chief learning and experience officer

Stacy Watkins (left), president and CEO, and Hilary Nelson (right), senior vice president and director of operations and compliance, at the Las Vegas Strip. Photo by Sammy Tillery

When it comes to supporting outliers in the Las Vegas community, Lexicon Bank knows how to play its cards.

By Tom Groenfeldt

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Lexicon Bank in Las Vegas opened its doors in August 2019, not long before COVID-19 shut down the city’s entertainment businesses.

“This is a Vegas bank,” explains Stacy Watkins, who was named president and CEO of the $237.6 million-asset bank in the early days of the pandemic. “It was really impactful for us when the lights on the Strip went out—a very emotional, crazy time. You have a bank that was born out of COVID and could have gone the other direction but ended up thriving.”

Lexicon Bank didn’t wait long to make a splash, sponsoring the 2021 World Series of Poker. It also aimed to capture the gaming market with its Professional Poker Banking Program, which is open to players who have participated in at least one of the World Series of Poker tournaments.

Professional players’ finances can be unpredictable and can bring increased regulatory scrutiny, making this a market many banks won’t touch. But as a community bank that is there to serve the gaming hub of Las Vegas, Lexicon Bank welcomes these players with open arms.

Its Professional Poker Player Program acts as a concierge banking service for qualifying professional poker players who need special services like having funds wired ahead to their tournaments. It also accepts the occasional $1 million or $2 million deposit from winning players.

A natural fit

In 2020, six-time World Series of Poker (WSOP) winner Daniel Negreanus moved his winnings account to Lexicon after another financial institution closed his account—a development the community bank addressed in a press release.

“With banking roots in the mecca of gaming for poker, serving as a banking partner for professional poker players was a natural fit for Lexicon Bank,” said Russell Rosenblum, chairman of the board and a poker enthusiast, in the press release. “Our bank has direct contact with the poker community through personal relationships, business partnerships and community endeavors.”

Those poker deposits, like all others at the bank, go through anti-money laundering screening by software linked to the bank’s core system. But the fundamental risk management in the bank’s professional poker program is old-fashioned Know Your Customer, done by people.

“The participating players sign a contract acknowledging that we’re going to ask them questions and they need to be forthcoming,” explains Hilary Nelson, SVP and director of operations and compliance. “We like to know our customers really well. What’s nice is that the World Series of Poker publishes a list of anyone who plays, and we learn how many other tournaments they play in around the world.”

That in-depth customer knowledge isn’t just for regulatory requirements or to control risk; it also enables the community bank to provide other services.

“If a professional player calls and they need something that we’re not able to do, we try to get them connected with someone that can,” Nelson says. “We know who they are, we know what their transactions typically look like and we can connect them with somebody who can help.”

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A small-business pipeline

While Lexicon Bank doesn’t offer consumer or mortgage lending, it does do small business lending, which suits its market. Several poker players own businesses and have brought over those accounts to Lexicon. In addition, poker players have recommended other players and small business owners to the bank.

One example of this was a surgeon who planned to set up a surgical center but had little business experience, so he came to Lexicon for assistance. “We quickly introduced him to our broker, merchant service processing and payroll processing, and linked him to our insurance broker,” Watkins says. “As a concierge bank, we were able to provide those value-added services that don’t have a fee schedule. So we might not be getting $5 or $25 for that, but we’re getting a relationship, a deposit account and potentially a commercial loan down the road. We’re focused on the bigger picture.”

“We do have legal businesses and industries that make Las Vegas thrive. We have found a way to service that and get the regulators comfortable. I mean, that’s what a community bank does.”
—Stacy Watkins, president and CEO, Lexicon Bank

Staying above board

With a large 14-member board of directors who know, and often own, local businesses, Lexicon has a local team that can make lending decisions fast, whereas outside banks can frequently be stuck with inflexible underwriting rules from headquarters.

“We do have legal businesses and industries that make Las Vegas thrive,” says Watkins. “We have found a way to service that and get the regulators comfortable. I mean, that’s what a community bank does.”

Officers at banks restricted by rigid policies often recommend Lexicon to clients they can’t accept, and Lexicon will take them on if they are legal, if the bank has a way to monitor them operationally and if they align with the bank’s strategic direction.

When a director from the World Series of Poker called the bank chairman on a Sunday afternoon, he looped in Watkins and they planned for her and another team member to be at the bank at 8 a.m. Monday, before regular hours, to open an account in time for the client to catch a flight.

“I met with them and the banker at the branch, and we were able to facilitate that account,” Watkins says. “It’s worth several million dollars because of that concierge experience.”

“We have businesses who say they want to bank with us because they want to give their dollar to a bank that’s doing something for the community.”

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Tom Groenfeldt is a writer in Wisconsin.

Illustration by Jess Rodriguez/Adobe

In 2022, ICBA’s award-winning ThinkTECH Accelerator program reached more community banks with innovative solutions and partnerships than ever before.

By Charles Potts, ICBA

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For ICBA and our community bank members, 2022 was a year full of potential. We not only continued to grow and improve on our iconic, award-winning ThinkTECH Accelerator program; we also reached more community banks with innovative solutions and partnerships than ever before. To build on these successes, ICBA announced plans to bring the ThinkTECH Accelerator program in-house with a new, dedicated office based in the innovation hub of Atlanta.

Here are just a few of the program’s successes since its inception:

• The ICBA ThinkTECH Accelerator was named Finovate’s 2020 Best Fintech Accelerator
• It has connected the world’s most innovative fintech companies with more than 1,000 community bankers and industry leaders
• Year over year, the program has grown by leaps and bounds—increasing the number of bank participants by more than 350% since its launch in 2019
• This year, we increased the number of new attendees by more than 50%, generating nearly 600 hours of thoughtful discussion

That’s what I would call creating a legacy of success. Others are taking notice as well; the program—and our cohort alumni—continues to receive coverage in influential media outlets like American Banker, Forbes, Reuters and Yahoo.

In step with community bankers

None of this would have been possible without community bankers who have worked diligently to advance their own innovation strategies and continue to provide critical thought leadership. They have helped make the program a reflection of the needs of our members, and by extension, their customers.

By bringing the ThinkTECH Accelerator program in-house, we can build on the solid foundation laid since its inception to reach even more community bankers, assure bankers of consistent-quality products and services, and extend innovation programming year-round.

Our commitment to creating and promoting an environment where community banks flourish is unwavering, and this significant investment is just the next step in ICBA’s innovation journey.

We ask that you continue to share your time and experience as we work collaboratively to shape innovative solutions that make community banks stand out in a competitive market.

As we reflect on 2022 and celebrate our successes, we look to the future with great anticipation.

“The accelerator is a great exercise for bank management to start thinking about what could be, rather than what is,” says Charles Flurry, CIO at First Financial Bank in El Dorado, Ark.

I couldn’t agree more. Community banks can take heart in the knowledge that as we advance, we will apply lessons from the past while aligning our program’s goals to address the unique needs of community banks by providing targeted solutions.

ICBA extends its heartfelt thanks to the many community banks that have invested time and resources into the ThinkTECH Accelerator program, enabling us to bring innovative solutions and partnerships to banks of all sizes. We ask community bankers to stay engaged and continue to lean in, provide feedback and take advantage of available resources as we work to reimagine the future of banking through innovation.

Innovation doesn’t stand still. And neither can we.

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Charles Potts (charles.potts@icba.org) is ICBA executive vice president and chief innovation officer

Clockwise from top left: Grand Ridge National Bank, Wheaton, Ill.; Community Financial Services Bank, Benton, Ky.; Bank of Montana, Missoula, Mont.; CNB Bank, Berkeley Springs, W.Va.; Midwest Bank, Norfolk, Neb.

What great resignation? In our annual workplace survey, employees of ICBA’s best community banks to work for told us they benefit from engaging cultures, opportunities for advancement and innovative benefits.

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» LESS THAN $250 MILLION

Bank of Montana: Breaking the mold

By Roshan McArthur

When a community bank’s employees refer to it as “a second family,” it speaks volumes, and that’s exactly what we heard from the team at Bank of Montana in Missoula, Mont. They describe the bank’s culture as one of hard work but constant support—a place where their voices are heard and their achievements celebrated.

We have health insurance that’s 100% paid by the bank, and we established two funds that are designed to cover the deductibles for family members, kids, the full gamut.”
—Tom Swenson, Bank of Montana

An entrepreneur with a background in accounting and finance, CEO and chairman of the board Thomas Swenson set up Montana Business Capital Corporation in 1998 with a focus on job creation and economic development lending. On Thanksgiving 2007, he founded Bank of Montana, which now has one branch and 13 employees.

Swenson’s goal has been to create a team of individuals who can manage themselves but also function well together. As a result, the $246 million-asset community bank intentionally has no tellers; instead, everyone has a variety of roles designed to give them a sense of ownership. Dogs are welcome in the workplace, and there’s a steady supply of snacks for any of the 11 children of staff members who may happen to stop by.

“We want to encourage family involvement and strong relationships, so we try to do things that reflect that in a tangible way,” Swenson says. “We have health insurance that’s 100% paid by the bank, and we established two funds that are designed to cover the deductibles for family members, kids, the full gamut.”

In fact, Bank of Montana is ranked number one out of 38 banks in the state for average salaries and benefits, according to FFIEC data. The bank issues time-of-need bonuses, extended maternity and paternity leave, and even sabbaticals.

Reasons to stay

“Once we’ve been here for 10 years, we are awarded a three-month paid sabbatical,” says Emilie Johnston, chief operations officer. “Two of us have gotten to take it so far. I took a month, and my husband and I fixed up the house a little bit, and then we did a West Coast trip and went to Europe for a month. It was very well spent!”

When asked how it feels to work with a company that gives benefits like that, she says, “I don’t know if there are words. I don’t know how to describe that feeling, honestly. But you don’t want to work anywhere else, right?”

Swenson believes in giving his team reasons to stay. “One of the things that we felt caused people to leave is the feeling of being trapped, that you can’t have the life experiences that you’d like,” he says. “So that was the origin of the sabbatical. How about encouraging people to go take that lifetime break? But they don’t have to quit to do it.”

Team members who want to invest in training are encouraged to do so. One just completed her CPA exam, passed a mortgage underwriter training program and ran the Chicago Marathon. “We strongly believe in empowering people so that they’re the best selves that they can be,” Swenson says. “Rather than trying to control them, we give them a sense of freedom to perform. I’ve had people say to me, ‘Aren’t you concerned that they’ll quit?’ We’re not scared of that. We don’t operate from a position of fear.”

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» $250 MILLION TO $499 MILLION

Grand Ridge National Bank: The premier league

By Roshan McArthur

Ask employees at Grand Ridge National Bank (GRNB) in Wheaton, Ill., what they love about working there, and the list is pretty exhaustive. A catered lunch once a week, baked goods for breakfast on Monday mornings, and birthday, anniversary and retirement celebrations all rank highly.

But those treats are balanced with benefits that include 100% health insurance coverage and a 401(k) matched from the very first day of employment. Other benefits include flexible schedules, the option to work remotely as needed and flexible paid time off.

This all contributes to what many describe as a healthy work-life balance, with plenty of opportunities for growth. It’s a hardworking environment but one where leaders have an open-door policy, encourage employees to make their own decisions and are highly supportive of professional development.

As team members describe it, theirs is “a culture of value and care.” They also say that “GRNB doesn’t take shortcuts when it comes to taking care of its employees and ensuring their happiness at the bank and in their role.”

As a result, it’s not surprising to hear that employee turnover at the bank over the past 12 years has been close to zero.

120 years in the making

Founded in 1903, Grand Ridge National Bank has grown from around $30 million in assets in 2010 to approximately $325 million today.

Describing itself as a “boutique banking company,” GRNB now serves small to mid‑size businesses and individuals throughout Illinois, Wisconsin, Indiana and Florida. Its Tampa Bay, Fla., office opened in 2020.

There is a team pride in our culture for the strong success and quality of work that we accomplish together.”
—Mark Scheffers, Grand Ridge National Bank

Commitment to growth

“Our culture starts at the top,” says chairman and CEO Mark Scheffers. “Our leadership consistently articulates and demonstrates a commitment to being a great place to work.”

GRNB’s high performance and success as a company provides team members with opportunities to grow and gain experience.

“We have established a culture where colleagues are highly supportive of each other, which provides for a great team environment,” he adds. “There is a team pride in our culture for the strong success and quality of work that we accomplish together.”

Educational benefits

To promote professional growth, the bank provides customized training, both one-on-one and for teams, as well as outside conferences and webinars.

“We meet with our team members individually every year to discuss their goals and objectives,” Scheffers says, “and then work together with them to help them to achieve them.”

It would be remiss to end this story without mentioning the VIP baseball and basketball tickets that almost every team member mentioned in their survey response.

“We provide all our employees with complimentary use of VIP tickets to sporting events like Chicago Cubs or Chicago Bulls games,” says Scheffers, “with access to all-inclusive clubs for food and drinks, where they can bring and entertain their family and friends, all at no cost to our team members or their guests.”

Sounds like a winning formula.

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» $501 MILLION TO $750 MILLION

CNB Bank: A strong culture of learning

By Bridget McCrea

NB Bank’s employees feel empowered to make decisions, enjoy the open lines of communication that they have with the institution’s leaders and often work together to achieve business goals. These are just some of the attributes that make the $530 million-asset community bank in Berkeley Springs, W.Va., a great place to work.

“It’s often said that if you keep employees happy, then the customers will take care of themselves,” says Mark D. Harrell, president and CEO. “We believe that. We also firmly believe that if we take great care of our associates, those employees will also take great care of our customers.”

Harrell also credits the bank’s board members—the majority of whom are owners—with staying true to CNB’s mission and supporting its 104 employees across eight locations. Founded in 1934, the bank serves a rural community where some customers don’t even have broadband access, while others commute to neighboring Washington, D.C., for their IT jobs.

Mentoring is a two-way street

A strong culture of learning is led by Karen Richards, vice president of marketing, who also oversees the creation of career paths for its associates.

A part-time teller who aspires to manage a branch, for example, can work their way up through various tiers and receive bank-provided ICBA Community Banker University courses and self-paced learning throughout the process.

CNB Bank also runs a mentoring program where veteran employees are paired with newer associates who want to learn more about different positions, new skills and career opportunities.

The mentors wind up learning from their mentees as well, making the year-long relationship a win-win for the bank.

“About 12 people have gone through the program, myself included,” Richards says. “We get a lot of good feedback from the mentees, but it also winds up being ‘reverse mentoring’ in that we all learn a lot from the younger associates.”

At CNB, employees are encouraged to get to know their customers and to focus on providing solutions as opposed to selling products. Harrell sees this as an important distinction for the bank, which takes care of customer needs by helping them save money, plan their financial futures and gain peace of mind.

Many times, individual solutions are customized to a specific client’s needs. So, if what’s offered doesn’t match their needs, staff members feel empowered to make decisions that lead to more specific, personalized solutions.

“We work in a highly regulated area, so we stay in our lanes as tightly as we can,” says Harrell, “but at the same time, we allow our folks to deliver to customers something that may be tweaked a bit here or there. We don’t just use cookie-cutter solutions for everyone, and that’s really helped us as a community bank.”

This philosophy aligns with the three pillars that CNB rests on: intelligence, experience and customized solutions. “When you have this type of environment, everyone feels good about what they’re doing,” says Harrell. “We all feel a sense of accomplishment.”

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» $751 MILLION TO $1 BILLION

Midwest Bank: Where family always comes first

By Bridget McCrea

At Midwest Bank, employees have management’s full support and are even encouraged to take time away from work and prioritize family functions. This is one of several reasons why the $990 million-asset community bank in Norfolk, Neb., has very low employee turnover and whose staff has made it one of the best community banks to work for.

“Family is always first,” says Sue Bachman, senior vice president and human resources manager for the 150-employee, 10-branch bank. “If Jimmy has his first baseball game on a Thursday, we want you to be there for him.” That family time doesn’t come out of employees’ vacation or sick time, either; it’s simply paid time off.

There have been many times when employees’ families have had health issues or needs and both ownership and management stepped up and took extraordinary steps to take care of them.”
—Doug Johnson, Midwest Bank

One big family

According to Amy Schroeter, vice president and HR for Midwest Bank, the community bank’s family focus extends outside of business hours. The bank’s events usually include an invitation for the entire family. And when a spouse or partner walks through the bank’s front door, they’re treated like family, too.

“Their families become our families,” says Schroeter.

A privately owned community bank, Midwest Bank has been in the hands of the Cooper family since it was founded 70 years ago. Over the years, four generations of Coopers have stayed true to their philosophy of working together to operate as a good employer, provide a fair return to shareholders and give something back to the communities the bank serves.

Hire them well, treat them well

Doug Johnson, president and CEO, says Midwest Bank has always focused on hiring good people, knowing that banking skills can be learned. Then, it works hard to treat those people well by supporting them both in and out of work.

“There have been many times when employees’ families have had health issues or needs and both ownership and management stepped up and took extraordinary steps to take care of them,” Johnson says. “Other employees see that happening and know that’s how we do business.”

As an employer, Midwest Bank encourages its employees to volunteer in and give back to their local communities. Bachman says the community bank itself is also active in the areas it serves. Working together, the bank and its employees help various charitable and community causes achieve their goals.

Take Midwest Bank’s Employee Jean Fund, for example. Associates are free to get comfortable and wear jeans on Friday, but they have to pay for the privilege. The money collected is placed in a fund and then distributed to various community foundations, organizations and nonprofits.

Customers benefit, too

Johnson says the bank’s customers also benefit when employees have the autonomy they need to be able to make good decisions and work as a team to achieve business goals. They also readily accept responsibility and take personal accountability for their actions.

This corporate culture has a positive effect on customer service. “Our employees know they can make decisions on the spot that are beneficial to our clients and keep the bank’s business interest in mind,” Johnson says. He also notes that employees use their best judgment to contribute to and partake in the community bank’s success.

“They don’t have to always knock on management’s door and ask, ‘Can I do this?’” he adds. “They have quite a bit of latitude and authority to be able to make decisions.”

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» MORE THAN $1 BILLION

CFSB: A true culture of caring

By Judith Sears

A culture of service and caring distinguishes Community Financial Services Bank (CFSB), according to Jason Jones, president of the $1.4 billion-asset community bank. “What makes us different is that we do truly care about our bank, our clients, our team and our stockholders,” he explains. “Culture for us is not just a noun; it’s a verb. It’s what we do.”

To cultivate a culture of caring, CFSB leaders emphasize frequent and transparent communication throughout the Benton, Ky., bank’s eight locations and among its 270 employees. “It’s a defined communication strategy to keep everyone in the loop,” says Allen Waddell, senior VP and assistant HR director. “Information is shared across the bank, whether it’s our financials, strategic opportunities or vision for the future. That extra effort to make sure everybody’s on board really sets CFSB apart.”

Team connections

Jones and Michael Radcliffe, who is chairman, CEO and chief credit officer, alternate creating weekly videos with news about the community bank that they email to all team members. CFSB team members can submit questions anonymously about any concerns, and Radcliffe and Jones will respond to them on the videos. “We emphasize the ability to talk openly,” Jones says. “We are as transparent as we can be.”

CFSB’s 55 team leaders meet monthly to take a deeper dive into bank accomplishments, project updates and current financial information. These meetings also provide training in specific leadership topics.

At the individual level, each team leader plans monthly meetings with each of their direct reports. These brief one-on-one meetings give team members an opportunity to talk with their team leader about anything of concern or interest to them. “People feel more comfortable in their own space,” Jones observes. “If you put them in a more comfortable position where they know you on a more personal level, it allows them to be more honest.”

A robust set of employee benefits further underscores the CFSB culture of caring. The bank pays 100% health and dental and has generous paid time off policies. CFSB also fully funds an employee stock ownership plan (ESOP). “The employees of our bank own roughly 30% of the stock. We are working for ourselves,” Jones says.

In response to employee suggestions, CFSB recently created a 401(k) program, giving team members the option to diversify their investments.

The bank’s calendar is chock-full of celebrations, such as monthly Culture and MVP of Ops Awards and birthday celebrations for each team member. “We are constantly making a big deal out of things and celebrating our team,” Waddell notes. Recently, when CFSB’s loss mitigation department achieved the lowest delinquency ratio in the bank’s history, all 20 members of the department and their plus-ones were treated to an elegant restaurant dinner.

Waddell says team members have responded positively to CFSB’s generosity, generating a virtuous cycle. “This year we’re on track to have our most profitable year in our history,” he says. “Whenever we take care of our team in salary and benefits, they take care of our clients. When our clients are taken care of, we will be profitable.”

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Roshan McArthur is a writer in California. Bridget McCrea is a writer in Florida. Judith Sears is a writer in Colorado.

Photo by MirageC/Getty Images

As community banks grow, their vendor partnerships usually also do, which can lead to challenges with organization, data security and more. To address these issues, some community banks have turned to artificial intelligence.

By Elizabeth Judd

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The dazzling possibilities of artificial intelligence (AI) have captured the public imagination. Think Scarlett Johansson’s voice as an AI-assisted virtual assistant and romantic interest in Her, or Janet on The Good Place.

In finance, too, AI has been held up as the answer to any number of challenges that community bankers face. And yet, some industry experts have observed that AI is not yet being used to its full advantage in vendor management—one of the thornier problems that community banks are wrestling with today.

If a community bank has just a handful of vendors, managing those vendors is fairly straightforward. Keeping track of vendor relationships through emails, spreadsheets and client relationship management (CRM) software is adequate for a small vendor ecosystem.

But because each vendor has its own set of contacts, contracts, processes and approaches to data security, the challenges of overseeing third parties mushroom as the number of vendors grows.

“Today’s banks may have many vendors, and each vendor has to submit a large number of documents to comply with [bank requirements],” says Robert Johnston, founder and CEO of Adlumin, a Washington, D.C.-based cybersecurity technology firm.

The true power of AI makes itself known when “extracting conclusions from large data sets,” he says. “Data science can make an impact in every industry segment, including vendor management.”

Improving communications

Natural language processing (NLP), an offshoot of AI and machine learning, can be an effective tool for vendor management, says Johnston. That’s because NLP can analyze text based on knowledge of how human beings speak and write.

“If you’re analyzing a contract for risk, you could train an NLP algorithm to recognize groups of words that represent what you’re looking for in a contract, like indemnification terms that are negative or that do not meet the company’s requirements,” Johnston explains. In such a scenario, NLP would allow a community bank to speed traditional processes dramatically.

“So much more data is in the cloud today. We’re using vendors that are ‘living’ in Amazon servers …
Our data is not just in our walls anymore.”
—Greg Ohlendorf, First Community Bank and Trust

Reviewing contracts is not the only AI play for streamlining vendor interactions.

“To automate communication with vendors, think about a chatbot,” suggests Johnston. “A chatbot helps you solve your problems without ever having to introduce a service person.”

Chatbots have the added attraction of being an AI-enabled product that many bankers already know, says Emmett Higdon, director, digital banking, for Javelin Strategy & Research. “Chatbots,” he explains, “are one of the first places where smaller banks will dip a toe into artificial intelligence.”

Safeguarding data

Community banks wrestling with vendor management soon find themselves fretting about data security. “So much more data is in the cloud today,” says Greg Ohlendorf, president and CEO of First Community Bank and Trust in Beecher, Ill. “We’re using vendors that are ‘living’ in Amazon servers … Our data is not just in our walls anymore.”

For Ohlendorf, using AI for data security is critical but not something that he’d tackle on his own.

“We’re not building AI solutions in our $200 million-asset community bank,” says Ohlendorf. He uses fintech providers to deploy AI to foil hackers and to guard against ransomware attacks for its vendors and the bank itself.

“Third parties can pose a significant security threat to an organization,” explains Adlumin’s Johnston. For instance, third parties that have been given access to a bank’s systems or its core can increase exposure to breaches. AI, which excels at analyzing reams of data and pinpointing suspicious activities, can be instrumental in safeguarding data and strengthening cybersecurity.

AI and innovation

Using AI to manage vendors has broader implications than simply solving a series of back-office or security headaches.

Many community bankers are keen to devise ways to distinguish themselves within a crowded field by being bold and experimental. If AI smooths the path to taking on more vendor partnerships, then it becomes a strategic imperative of its own.

“Smaller banks are not hesitant to try new stuff,” says Higdon, noting that AI is among the solutions he’s observed community banks experimenting with. “When we look for innovators,” he says, “often we hear that it’s not coming from the big-name banks. It’s the smaller banks that want to innovate and will try new things.”

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Elizabeth Judd is a writer in Maryland.

Photo by Nate Smallwood

First National Bank and Black Tech Nation Ventures teamed up to support minority-owned startups in the Pittsburgh community and beyond.

By Elizabeth Judd

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Driven by her goal to cultivate a supportive community for diverse tech startups, Kelauni Jasmyn founded the fiscally sponsored nonprofit Black Tech Nation in Pittsburgh in 2018. And in 2021, she became one of three founding general partners of Black Tech Nation Ventures (BTN.vc), a venture capital fund for tech startups led by Black and diverse leaders. The venture capital fund itself is one of a very small percentage of majority Black-owned venture capital funds operating in the U.S. today.

“Our goal is to help Black and diverse tech startups to build their companies to be unicorns,” Jasmyn says, defining “diverse” as companies owned by Black women or Latine, LGBTQ+ and Indigenous people.

In May 2022, $42 billion-asset First National Bank (FNB), based in Pittsburgh, announced that it would make an equity investment in BTN.vc as part of its 2020 pledge to devote $250 million to addressing “economic and social inequality in low- and moderate-income communities,” says Vincent J. Delie Jr., chairman, president and CEO of F.N.B. Corporation and its banking subsidiary, First National Bank.

For FNB, investing in this unique venture capital opportunity aligns with the community bank’s commitment to strengthening the communities it serves.

“We look forward to having a front row seat,” says Delie, “as [BTN.vc] foster[s] a thriving network of diverse innovators and entrepreneurs who will influence the tech landscape for years to come.”

Filling a need for diverse startups

In recent years, Jasmyn had been approached by several high-net-worth individuals and fund managers interested in investing in Black- and diverse-led startups.

She contacted experienced venture capitalist Sean Sebastian, founding partner of Birchmere Ventures, also based in Pittsburgh. Sebastian signed on as general partner, along with David Motley, cofounder of the African American Directors Forum.

BTN.vc is already over halfway to its $50 million fundraising goal. Jasmyn anticipates that the fund will hit the full close by the end of this year or early 2023.

Out of the 25 to 30 companies that BTN.vc will invest in over the next three to four years, the fund has already put money to work in five startups: one owned by a Black man, three by Black women and one by a Latine woman.

Jasmyn is eager to support entrepreneurs within the Pittsburgh area but emphasizes that the fund is scouring the whole country for the right investments.

Part of her mission, she says, is to create “longevity and generational wealth for underrepresented communities.” In this sense, she says, she and her partners are tackling the vexing problem of the racial wealth gap, because successful tech founders will have money to invest in their communities—or in other startups by people with similarly diverse backgrounds and ethnicities.

Five years ago, Jasmyn worked as a substitute teacher at a Chicago high school that she herself attended. She is keenly aware of the privilege she now wields.

“If we can continue to build more VCs and companies that look like me, it’s going to be a huge impact, not only financially but societally as well,” she says.

“My passion,” Jasmyn continues, “is to use what I have to give back to my community and create wealth and opportunity for myself and for them, too.”

Making intentional investments

Jasmyn praised FNB for “supporting this type of work and for making investments in the communities in which [the bank does] business.”

“First National Bank is instrumental in Pittsburgh,” she says. With the fund, Jasmyn aims to build partnerships within Pittsburgh’s tech ecosystem to attract and support Black tech professionals.

Delie shares a similar goal. He says FNB has “deliberately placed regional headquarters, offices and operational centers in or near underserved areas and urban centers to promote job creation and economic success.”

What’s more, Delie sees the community bank’s commitment to BTN.vc as part of a larger pattern. He notes that the bank’s new headquarters tower is located in the Hill District of Pittsburgh. This makes FNB one of the only public companies to locate its headquarters in a marginalized community.

When determining the size of investment FNB would make in
BTN.vc, the bank worked closely with the fund’s three general partners. The contribution, says Delie, “achieves an optimal balance between meaningful impact for the fund, anticipated returns and adherence to our responsible risk profile.”

In many ways, Delie’s goals for FNB and Jasmyn’s for BTN.vc fit together beautifully.

“We want to support Black and diverse startups,” concludes Jasmyn, “because we realize when all tides rise, everyone rises.”

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Elizabeth Judd is a writer in Maryland.

From blending differing values to choosing a new chairman, there are many challenges that can arise after a merger or acquisition. We spoke with legal and financial experts about what questions community bank leaders should ask themselves pre-merger, what issues they may face and how they can build an even stronger financial institution.

By Bridget McCrea

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Combining two banks into one is a complex undertaking. Between the due diligence, financial negotiations, technology integrations and the unification of two established operations—be it via acquisition or merger—the process can be risky and challenging. There may be substantial rewards at the other end, but that doesn’t necessarily make the journey any easier.

As both sides of the table work out the details, post-merger board succession planning should be a key topic of discussion. It’s an aspect of the deal that shouldn’t be left until the last minute, although it often is. “What’s going to happen to your board once your banks merge can’t be an afterthought,” says Anton J. Moch, a bank M&A and governance attorney at Winthrop & Weinstine, P.A., in Minneapolis.

“These conversations should take place at the very beginning of any transaction, with a focus on how to put the boards together, who will stay or leave and who will be the new chairman of the board,” he continues. “You can’t wait until you’re signing a purchase agreement—or worse, until you’re closing on a deal—to figure out how you’re going to work with two disparate boards.”

This is important, because banks with strong boards are generally well positioned in their marketplaces, understand their customer bases and make good decisions. Those with weak boards tend to struggle with decision-making due to disagreements either among board members or with executive officers.

“Community banks are heavily influenced by their boards of directors,” says Greyson Tuck, president of Gerrish Smith Tuck Consultants and Attorneys in Memphis, Tenn. “The board makes decisions, maintains control and produces business for the bank. These are all important responsibilities for a bank as it goes through the merger or acquisition process.”

Preserving the value of the transaction

When one community bank acquires or merges with another bank, there are many steps to take and considerations to discuss. Some of the most important questions to ask are: Who are our key players? What are their relationships to the bank? How can we best preserve the value of those relationships?

“Ultimately, that’s where the value lies in the acquisition process,” says Tuck. “It’s about the extent to which you can preserve the relationships. This, in turn, preserves the value of the transaction.”

Post-merger board succession doesn’t always mean picking a handful of current directors and creating a single combined board either. For example, Tuck recently worked on a deal where the holding companies for two different rural community banks were interested in merging the two entities into one. The talks took place between the two holding companies and initially focused on the future direction of the combined bank, including the succession plans for the current officers and directors. Discussions centered around culture and fit as the banks worked to keep as many active board members onboard as possible.

Then, the banks decided to set up two boards: one focused on technology, operations and day-to-day contact with the community, and the other centered on business planning and strategy. While there was some overlap across the two boards, the bank worked to identify individuals who would be best suited to each specific group. Tuck says this “brought a new focus for those two organizations as they put the boards together.

“Ultimately, it ended up working out pretty well for them thanks to those very early discussions that took place before deal pricing and future plans were even discussed,” he says, advising a similar, proactive approach to board succession planning for any community bank that’s merging with another institution.

“Right from the start, there was a clear focus on the expertise and skills of the existing directors at each organization. Then, a lot of thought went into which individuals would be the best fit for each board.”

What to do when family is involved

On the surface, an M&A deal involving a family-owned community bank looks just like any other deal. Those similarities usually end when the layers are peeled back on the family-owned entity, whose corporate culture isn’t always reflected in the books, so to speak. For this and other reasons, post-merger board succession planning for this type of bank requires a special touch. Success will depend on whether the new guard can respect the synergies between the banks’ cultures, the founding family (or families) and the communities that they serve.

Another complication is the fact that family members likely serve on the bank’s board or as the majority board. “With most family-owned banks, 60% to 70% of the board members are family members and 20% to 30% are outside directors,” Tuck explains.

If those family members don’t want to give up control to a board that’s diluted by non-family members, the challenges may mount. One way to resolve the issue is by creating a holding company board that has a different composition than that of the bank board.

For example, at the holding company level there may be six directors, four of whom are family members and two of whom are outside directors. Then, at the bank level, there will be 10 directors, six of whom are family members and four of whom are outside directors. Tuck says this is a very common post-merger board succession scenario for family-owned banks.

“That gives a family comfort, because ultimately the bank board members are elected and come into their position as directors by the consent of the holding company,” Tuck points out. “Particularly for a family-owned bank, this strikes the balance of giving the family the control they want while allowing an appropriate number of outside directors to be involved.”

Working through differing priorities

Once a community bank has reached the point where it’s decided that a merger with another institution is what’s best for the organization, it should turn its attention to the post-merger board plans. “If you fail to do this, it’s basically like dropping the ball on all of the work that goes into the merger planning and strategizing process,” Moch cautions. “Your board will set the entire direction for the merged organization.”

[A chairman] can help guide and direct the discussions to ensure that, even if there is disagreement, once a direction is picked, everyone gets on board with it. A strong chairman can make a big difference in driving that forward momentum for the board itself.
—Anton J. Moch, Winthrop & Weinstine, P.A.

With the stage set for post-merger succession planning, banks may have to work through differing priorities among new and existing board members. To effectively address these and other conflicts, Moch tells banks to lean on the organization’s mission, goals and position in the community that it serves. They should ask questions like:

• What do we want this bank to be?
• How can we accomplish this?
• What are our strengths and weaknesses?
• How can our board help us leverage these strengths and overcome the challenges?

“Have a clear direction even if there’s competing interest. That way, you have something to go back to,” Moch says. If the board itself can’t reach a consensus, he advises bringing in an outside mediator to work through the issues and help set baseline business strategies. Invite board members to voice their opinions throughout the process, he adds, but ultimately also know that a majority of the board needs to approve decisions. Having a strong chairman in place can help banks achieve that consensus.

“He or she can help guide and direct the discussions to ensure that, even if there is disagreement, once a direction is picked, everyone gets on board with it,” says Moch. “A strong chairman can make a big difference in driving that forward momentum for the board itself.”

Honoring experience and planning for the future

Depending on how long a community bank has been in business, there may be board members who have been in place for decades. They each bring their own strengths and experience to the board, and their longtime knowledge of the banking industry makes them valuable assets for the organization.

As the banking environment, technology and customer preferences all continue to change, boards can also benefit from some fresh faces who may bring different perspectives, experience and ideas to the table.

A merger is a prime time to bring new and established members into a combined board that honors experience and helps the new entity plan for future success. One way to do this is by adding people with diverse experience and career paths to the new board, says Joshua M. Juergensen, principal, financial institutions at CliftonLarsonAllen LLP in Minneapolis. Start identifying these potential board member candidates—internal and external—as early as possible in the M&A process, he advises.

Next, consider sending these individuals to ICBA LEAD FWD Summits, ICBA LIVE and other industry leadership events for further education and training and to take advantage of networking opportunities. “There’s a lot of value in sending up-and-coming generations to various ICBA events,” says Juergensen, who feels that the industry as a whole needs to do a better job of helping these individuals set career paths and work toward leadership roles in community banking.

“We need to help them see the value of being in the banking industry, because without that, we’re not going to be able to retain the next generation of banking leaders who are currently in school,” Juergensen says. “They need to see the value of being in the industry and serving as leaders, directors, board members and chairmen of the board.”

Communication is key as you work through the M&A process and try to understand the buyer’s and seller’s position and then try to synthesize those to get the best possible result.
—Greyson Tuck, Gerrish Smith Tuck Consultants and Attorneys

Striking the right balance

To banks that are working through the post-merger board succession process or planning an M&A transaction soon, Tuck says the most successful deals usually involve some level of give and take. Sellers want to feel good about the process itself and their banks’ futures, and buyers want to know that they’ve acquired a valuable asset that will succeed over time. The board plays a crucial role in making that happen and should be a top-of-mind consideration as a bank works its way through the process.

“Communication is key as you work through the M&A process and try to understand the buyer’s and seller’s position and then try to synthesize those to get the best possible result,” Tuck says. “That doesn’t mean everyone will get everything that they want, but it does mean that you have to strike the right balance between the competing interests.”

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Bridget McCrea is a writer in Florida.

ITMs and VTMs are popular retail banking innovations among community banks.

What’s on the horizon for retail banking? We spoke with two community banks that have ramped up their services to meet—and exceed—the changing expectations of customers.

By William Atkinson

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According to a new report from PwC titled “Retail Banking 2025 and Beyond” (see sidebar), the retail banking industry is undergoing tremendous change—but, of course, community bankers already know that.

“A few years ago, it was a fairly straightforward business, but today, technology and innovation, increasing competition, regulatory complexity, embedded finance, consolidation and evolving customer expectations are placing immense pressure on traditional business models,” the report said.

This intricate and evolving web of trends influences who consumers trust and how they prefer to conduct their financial lives. It also forces banks to address the fundamental question of what a financial institution is—and what value it provides.

So how are retail banks meeting this challenge?

Community banks are constantly looking to the future and identifying what customers want. One such bank is $1.7 billion-asset One Community Bank (OCB) in Oregon, Wis. It has introduced a plethora of new retail banking initiatives in the past couple of years, including online account opening for anyone in the state of Wisconsin. The community bank offers a variety of deposit offerings through its online account platform, which can easily be accessed from its website.

“We do thousands of video banker transactions every year. Clients appreciate the longer hours and the convenience of not needing to leave their cars but still being able to get service with a personal touch.”
—Jeff Versluys, One Community Bank

“Importantly, as we have created and launched new promotional products with preferred rates, we have made those products available in the online platform,” says Jeff Versluys, executive vice president and chief retail officer for OCB. The initiative is working. “The number of accounts that have been opened via this new channel has significantly exceeded our expectations.”

In addition, several of OCB’s locations in Dane County boast interactive teller machines (ITMs). Most are outside in the drive-thrus, but its new Middleton bank, which is situated in a walking community, has an ITM in the entry vestibule that’s accessible after hours.

“These can be used as ATMs but also offer video banker service,” Versluys says. “We do thousands of video banker transactions every year. Clients appreciate the longer hours and the convenience of not needing to leave their cars but still being able to get service with a personal touch.”

More VTMs to benefit customers

Gorham Savings Bank in Gorham, Maine, has also found that upgrading its teller machines has enhanced customers’ banking experience. By expanding its video teller machine (VTM) fleet, it efficiently provides extended banking hours to customers. “Every branch location now has a VTM, and we have added a terminal at a coffee shop in a community where we don’t have a branch, to add convenience for our customers,” says Dan Hancock, chief deposit officer.

The $1.5 billion-asset community bank piloted its VTM initiative several years ago, and it has expanded significantly over the past year.

“The primary objective was to extend banking hours for our customers,” Hancock says. “Our VTMs are open from 7:30 a.m. until 6 p.m. Monday through Friday, and the addition of the offsite terminal has helped to fill in a gap in our service area, giving our customers added convenience.”

By hiring a digital engagement specialist to help customers make the best use of mobile and digital services, Gorham Savings has increased the use of these products.

Overall, customer reaction to the community bank’s many initiatives has been positive. “We have seen an increase in mobile and digital usage, like other banks,” Hancock says, “but these initiatives have helped expand that engagement from balance inquiries and funds transfers to more complex needs like money management and managing debit card security.

“In addition,” he continues, “our offsite VTM has become one of our busiest terminals, so customers have appreciated being able to conduct their banking with a video teller instead of driving to a branch, and because they are speaking to a live person, the experience is more personal than using an ATM.”

Reaching customers

Of course, successful retail banking requires more than just technology. Earlier this year, OCB introduced its Colleague Banking Initiative (CBI). “We don’t take it for granted that a colleague will choose to do their banking with OCB,” Versluys says. “Many do bank with us, of course. However, to increase the number of colleagues who are also clients, we decided to educate and incentivize. As a result, we have been able to increase the percentage of ‘colleague/clients’ by 20%.”

“During COVID, we [built] a resource team that could connect customers with community resources to help them with a wide range of needs. We are now in the process of building out this knowledge and skill set in our branch teams.”
—Dan Hancock, Gorham Savings Bank

To achieve this, the community bank employed multiple strategies. First, it offered incentives to both new colleague/clients and those colleagues who were already customers before the initiative. The incentives included one PTO day for the current year and every year that the colleague remains a client, as well as drawings for $100 gift cards. Second, OCB created a dedicated CBI support team to help colleagues with banking questions, open new accounts and protect the privacy of their information. Third, it conducted multiple town hall live video sessions to help spread the word on CBI and answer questions.

As always, financial education plays a key role in deepening customer relationships. It’s an important focus for Gorham Savings Bank, which provides its customers with access to tools and resources to help them improve their financial wellness.

This began with its launch of Personal Finance, a software program that helps customers budget, track spending and manage savings goals. “We then expanded that by hiring a financial wellness coach to provide more personalized advice and guidance,” Hancock says. “During COVID, we expanded that approach by building a resource team that could connect customers with community resources to help them with a wide range of needs. We are now in the process of building out this knowledge and skill set in our branch teams.”

Expanding availability

Recently, Gorham Savings Bank began offering Smart Start, a Bank On-certified checking account to provide everyone in its community with access to safe and affordable banking.

“Part of our mission as a bank is to promote financial wellness, and we felt a responsibility to help our customers through challenging times,” says Hancock. “Since then, inflation has had a big impact, and being able to provide tools and advice to help customers adjust their budgets has been helpful.”

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William Atkinson is a writer in Illinois.

“The habits of our customers change, and we’re constantly walking beside them, transforming our services to meet their needs.”

Digital transformation. Those words have been bandied about with increasing fervor, fueled by a heightened sense of urgency. Yet, while the digital movement has increased pace, it’s more of an evolution than a revolution.

When I think about this concept of “going digital” in our industry, I’m struck by the fact that it involves continual change over time. The habits of our customers change, and we’re constantly walking beside them, transforming our services to meet their needs. It’s never been about being on the bleeding edge or doing what everyone else is doing, but about better addressing the interests of our distinct communities.

And in today’s shifting landscape, it’s more important than ever to make sure we’re evaluating our offerings with blinders off. How honestly are we assessing our products and services? How are we ensuring our channels and tools are meeting customer needs? If we’re still updating our technology plans once every three years like we’ve always done, is that enough?

While these questions are challenging, there is information surrounding us that can help shed light on the right responses. For example, consider your transaction volume: How are payments clearing today versus three to five years ago and why? Or listen at account opening: What questions are being raised relative to your products? Also consider your customer service center, teller insights and other channels: What inquiries are coming through? What are customers asking for at the frontline?

These findings will give you greater insights into where technology is meeting needs and where you may need to shift to meet new digital expectations. When and how you do this depends on your audience. Customers are transforming at different paces, so analyzing the steps you can take to have the greatest impact will enable you to be strategic in product planning and create efficiencies for your bank in the process.

So, as you read this issue, I encourage you to think of the articles as resources in your digital evolution. In addition, ICBA Bancard has produced a digital transformation white paper and workbook to guide community banks more specifically in their evaluation process of digital payments and strategies. These tools are available to ICBA members and can be downloaded on our website.

No matter what approach you take, now’s the time to make sure you’re considering what’s next for your customers’ digital journey. Shifting your tech plans and processes to keep pace with the changing environment will guarantee that you can support customers in new ways, maintaining the same level of service they seek and expect.

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Rebeca Romero Rainey
President and CEO, ICBA
Connect with Rebeca @romerorainey

John V. Anderson bought F&M Bank in the early 1970s. It’s a third-generation family business today.

John V. Anderson celebrates 75 years in community banking this year. The chairman emeritus of F&M Bank offers us a glimpse of his life, his career and the lessons he’s learned along the way.

By Molly Bennett

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How do you capture a life in 1,000 words? The answer: with difficulty. And when that life takes in the Great Depression, World War II and 75 years in community banking, the challenge becomes more acute. But here goes nothing.

John V. Anderson, who is 95, is chairman emeritus of F&M Bank in Crescent, Okla. Since buying it 50 years ago, he has watched it grow from a single-branch community bank to one with nine locations across the state and $650 million in assets. His three sons and one daughter are all involved in the 100% family-owned business, as are three of his grandchildren.

“And I’ve got great-grandchildren now that are beginning to drive cars, so that’s the next wave that wants a job,” he laughs.

“In these 75 years, I’ve made a lot of friends. I just did the best I could at whatever job I had.”
—John V. Anderson, F&M Bank

Anderson’s family ties have always been strong. He was born into a farming family in Choctaw, Okla., in 1927. His father’s family, members of the Citizens Potawatomi Nation, farmed corn and cotton, and his mother came from a produce farming family.

When Anderson was three, his father lost his job at the local utility company. “We had to skimp and save,” he says. “We picked cotton, and we chopped cotton and corn. We didn’t have a car, so we had to walk out to the fields. That made such an impression on me. So, every job I’ve had, I would do the best job I could.”

In 1945, right after high school, he enlisted in the Navy, finishing boot camp right as the U.S. dropped the bombs on Hiroshima and Nagasaki. He was stationed on an aircraft carrier and took part in Operation Magic Carpet, which saw U.S. troops collecting armed forces personnel from various Pacific islands and dropping them off at San Diego or Pearl Harbor. “We were a part of a really joyful time, because everybody was coming home,” Anderson says.

The banking adventure begins

After he was discharged, he worked at a utility company before taking a job at Liberty National Bank in Oklahoma City in 1947. There, he worked his way up from messenger to teller to the correspondence department. The latter is where he met his wife, Jo Laverne, who is 93.

“She worked about 10 feet from me … and I thought she was a pretty good-looking girl. I’d shoot a rubber band back there once in a while just to get her attention,” he laughs. The couple celebrated their 73rd wedding anniversary in September.

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But back to 1972. That year, Anderson was senior vice president of operations at Liberty when one of his industry connections, J.R. Gibson, who owned F&M Bank in Crescent, Okla., told Anderson he was looking to sell due to health problems.

“He said, ‘If you are interested, you’d be my first choice,’” Anderson says. “I said, ‘J.R., let me tell you that I don’t have any money, I have no net worth and I have no secondary source of income. But I’ll see what I can do.’”

Anderson went to some colleagues at Liberty National Bank, and they agreed to consider loaning him the $548,000 he needed—about $4 million today. “And I thought, if you make me a loan, you’re probably the worst loan officers I’ve ever run into,” he laughs. “But anyhow, they made that loan.”

Anderson says that when one of the presidents at Liberty heard about the loan, he said, “Let me tell you something. You’re gonna be one of the last guys that can buy a bank with just sweat equity.”

And so began the Anderson family’s ownership of F&M Bank. It was a baptism of fire: The late 1970s and early 1980s brought a recession, high inflation and higher interest rates; Anderson was paying 18% interest on the loan he used to buy the bank. But F&M survived through hard work and the connections Anderson had made.

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Since then, the community bank’s growth has been steady. It acquired a handful of distressed banks over the years and opened branches to expand its footprint. Anderson has been an active member of the Oklahoma Bankers Association and ICBA, and he also sat on the board of First National Bank & Trust Co., a Potawatomi tribal bank in Shawnee, Okla. His son, John Tom Anderson, is a current director.

“We have excellent relations with the tribe, and [F&M Bank] does some loans with the Bureau of Indian Affairs,” Anderson says.

Today, he and his family have their eyes on the future. “Right now, we’re in the process of drawing up rules for employing family members,” he says. “We want them to have a good education, and we want them to work someplace else for three or four years to see what it’s like to work for somebody that’s very objective. We want them to observe the same standards that everybody observes when they come to work for us.”

In 2019, Anderson was inducted into the Oklahoma Bankers Hall of Fame. “I thought that was something,” he says. “I’ve done that through mentors and friendships, and in these 75 years I’ve made a lot of friends. I just did the best I could at whatever job I had.”

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Molly Bennett is executive editor of Independent Banker.