How community banks stand out from their larger competitors

While there are many banking options for business owners, community banks can offer something many others can’t. 

“We get to know each business,” says Steve Hendricks, EVP, North Central Market President, Premier Bank. “We get to understand each business. We get to know their key employees and institutionalize that knowledge so that everyone at the bank knows them. All decisions are made locally, which is important because it’s not just about securing a loan, it’s about what happens after.”

Smart Business spoke with Hendricks about the benefits for businesses of working with a community bank.

What makes a community bank unique?

Most loans contain an agreement requiring reporting requirements, financial performance standards and expectations. A community bank can custom fit these loan agreement requirements. Community bankers are empowered to be advocates for their clients. They, along with the local market president, understand the market, get to know clients, understand their business needs, and have direct access to facilitating a quick response. Bankers are empowered to care for their clients and advocate for them if trouble arises. A community bank puts the community first, helping clients with financial solutions for themselves, their families or their businesses.

Further, community banks can customize products to fit the business. They’re relying less on standard ratios and more on their knowledge of the people and the business. That means building products to fit the specific needs of the business, designing covenants that are manageable and finding ways to work with companies to get them what they need.

Community banks are focused on providing personalized attention. At a community bank, you will find a team of dedicated professionals, who will become your partners throughout the years. This is also echoed by bankers being empowered to make decisions for quick turnaround and with the client in mind.

Community banks socialize their clients so they’re known by several people within the bank. Often, when initial proposals are made to prospective clients, there can be multiple people from the bank in front of them. So, from the start, a knowledgeable team is available to them to provide wrap around service. They get to know the branch manager, their portfolio manager, the credit officer, and often even the market president in addition to the banking assistants that will help them out on a day-to-day basis. 

How does banking locally support the community?

Community banks are unique in that they build support for the local community into their model. They believe in reinvesting in the communities that they serve. Partnerships with community organizations allow community banks to share their knowledge and educate, empower and nurture the next generation of leaders who will strengthen the community. For example, community bank employees often log hundreds of volunteer hours at local nonprofits. Their team members also often participate on a number of local boards. 

Not only are the team members spending time giving back to the community, they also live and work locally — they shop locally, network with customers and make connections. The more local businesses that work with a community bank, the more they can give back, which offers tremendous benefits to the local economy.

What should businesses consider when choosing a bank?

Business owners today have so many options when it comes to capital sources. It can be the case that some business owners get caught up in trying to find the lowest rates and the least amount of structure as possible on their capital while also trying to secure the most amount of money they can. However, when that’s the approach, there’s a lot that’s overlooked.

At community banks, it’s all about people. It’s relationship banking. It means being trusted advisers, not just application takers. Business leaders should evaluate what’s important to them in a bank. Often, it’s not just price or the best terms and conditions. Instead, it’s the overall relationship. 

Steve Hendricks

EVP, North Central Market President


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