It may not have thousands of ATMs or branches spread across a hundred cities in six states, but tiny Falls Bank has found a way to compete with its giant competitors in the banking industry.
The concept is simple: Give people personal service and bring back niche products that larger banks have eliminated because they don’t fit in their corporate profit structure.
“We compete by focusing on the people that come in our doors,” says Rod Vargo, the bank’s president and CEO. “Our job is to tell them the information they ask for and treat them like humans and know who they are. People do crave individual attention.”
Vargo says that communication tends to break down in larger organizations, regardless of the industry. As a result, customers feel less appreciated.
“As you grow, businesses tend to get away from the people who made you who you are,” says Vargo.
Falls Bank focuses on customers, making sure they know they are appreciated. It starts with free coffee, cookies and popcorn in the bank, and includes products that harken back to banking before the mass merger era.
“Children’s accounts, for instance, at big banks, have minimums that are so high or have so many fees for activities that it really affects those accounts,” says Vargo. “They get charged right off the books. We set up an account for kids that have no fees or minimums, and we have a stool for them at one of the teller windows.”
The bank also offers a passbook savings account. With Internet banking, many banks have done away with passbooks accounts, with which you get a small book with a log of all your account activity that is updated with each visit.
“We still have passbooks savings accounts, which are somewhat a relic of the past,” says Vargo. “There is still a group of people that want to have their book with them and see their history. It has been a very popular account. Many banks have converted out of that realm to statement savings.”
With mortgage lending, Vargo says, Falls Bank doesn’t sell the mortgages to other entities.
“We decided we wouldn’t do that,” says Vargo. “We service everything here. Having a loan sold isn’t a problem until the customer has a problem. It’s difficult on a national basis to get somebody to talk to.”
The strategy has worked thus far. Started in 1999, the bank has assets of $77 million and continues to grow.
“What seems to be propelling us is word of mouth,” says Vargo. “We have no-nonsense products. You call us about a rate, we give you the rate and the costs. Nothing is concealed. Our business customers have appreciated talking to the same guy month in and month out. We have no turnover at all. Business owners appreciate that we remember them and the details of their business. We don’t have the churn the big commercial lenders have.”
With only one branch open and another planned, giving customers easy access to their money meant forming alliances. Falls Bank joined an alliance of small regional banks so that customers from any of the alliance banks can freely use ATMs from any other member bank. Falls Bank also has an agreement with Key Bank so that its customers can use any Key ATM in Ohio or the Southern states free of charge.
“We need to think about the customers we are serving,” says Vargo. “We have to ask ourselves every day if we have delivered the goods and services they need. If we deliver it with a caring attitude, it makes so much difference.”
HOW TO REACH: Falls Bank, (330) 929-6000
Community investment
Falls Bank, a small bank with $77 million in assets, was looking for a location to expand its corporate staff and add a second branch.
The solution was the purchase of a run-down shopping center on Graham Road.
“We will put a branch in there and move our corporate headquarters there,” says Rod Vargo, president and CEO of the bank. “We are condiminiumizing the rest. Merchants can own their space instead of leasing it. It lets us get out the investment we put into it.”
The bank has completed a $1.5 million upgrade to the plaza.
“I think the whole community is excited about the work we are doing,” says Vargo. “We’ll expand our market and corporate headquarters at the same time.”
Growth is in the company’s plans, but only within certain limits.
“Growth by virtue of the size of the company is diametrically opposed to good service,” says Vargo. “It’s hard to keep your hands around it as you add people and footprint. If we get back to the size of the former company (Falls Savings and Loan, acquired by Fifth Third Bank in the 1990s), 18 branches and $500 million in assets, that’s a comfortable size where you can still have hands-on management.”
