At half-past twilight in the marble-floored institution formerly regarded as a bedrock of the community, enterprising financiers congregate around the conference table, thumbing through spiral-bound strategies to boost profits by downsizing, restructuring and automating.
Buried in the bottom line, they’re caught off guard when in saunters a brawny community bank, holster full of heritage, calling for a showdown.
“Complacency is a dangerous quality in today’s competitive market,” cautions Ann Hunter Durr, senior vice president of Valley Savings Bank in Cuyahoga Falls. “There aren’t a lot of financial institutions that can say they’ve been a locally owned and operated bank since the early 1900s. Our heritage and staying power bring a lot of credibility that other banks can’t tote.”
Durr recalls a scene in 1995 when a competing savings and loan succumbed to merger mania. Distanced and disillusioned, many of its customers withdrew their assets and fled, beating a path to Valley Savings’ door.
“When they walked into our lobby, we listened intently to why they made their exodus. They had this sense of abandonment, like they were just another number,” she says. “When they came in here, they got an immediate feeling of warmth from the environment and the staff, and they were thrilled.”
Even though Valley Savings had no drive-up teller windows, ATMs or debit cards until recently — nor were business banking services offered until 1998 — Durr says customer feedback indicated that Valley was doing something right.
“After so many years of service, we had created a niche for ourselves as a service-oriented community bank. Hence, market challenge becomes market advantage,” she says. “We’ve learned to use our size to our advantage in differentiating ourselves from the competition.”
Founded as collaborative effort among Durr’s grandfather, Clarence E. Motz and other community leaders, the bank, then called The Cuyahoga Valley Savings and Loan Co., opened its doors at 112 Portage Trail on Feb. 14, 1923. John B. Hunter, Durr’s father, served as chairman between 1964 and 1990 until his son, David M. Hunter, took the helm.
Valley originally offered passbooks, certificates of deposits and new home loans for the growing Cuyahoga Falls and Stow communities. The bank moved to a new home at 140 Portage Trail in 1961, and over the years, the building expanded, as did the bank’s offerings.
The name changed to Valley Savings Bank in 1996, and in 1997, a branch office opened at 505 Graham Road.
Today, Valley Savings is a community bank that serves Summit County, boasting about $100 million in assets and offering a full line of personal and business banking services. But it’s still a familiar, hometown bank that holds fast to its service-oriented traditions, partly because Durr’s brother, David, serves as chairman of the board and CEO, and their mother, Kathryn Motz Hunter, sits on the executive committee as the major shareholder.
David Hunter, who is a partner at Brouse McDowell LPA, says his legal expertise is an asset to the bank.
“It allows me to help the bank identify legal issues it has to face in the rapidly changing financial arena,” he says. “And happily, I’m able to draw upon the skills of over 70 lawyers here at Brouse McDowell.”
Durr says she and her family take pride in operating a successful community bank that has stayed on course despite shifts in the financial services industry — the S&L crisis, the emergence of mutual funds and slick brokerage firms, and the advent of massive mergers and acquisitions.
“A lot of larger institutions purport that they’re community banks, but they’re just not. And when they use the term personal banking, it drives me nuts, because that’s truly what we have always done,” says Durr. “The truth is, you see larger corporations slipping away from that personal touch because it costs them too much to do that.”
But Durr admits that changing with the times to compete with large commercial banks has been a David vs. Goliath endeavor.
“When we compared ourselves to the big banks, we realized that we had to make some changes to remain competitive,” she says. “Through intricate observation and discussion, we set out to devise a plan that would allow us to reinvent ourselves to be competitive. We did that by transforming our market challenges into our market advantages.”
** missed drop char **Think big, appear small
Durr says that when Valley sought to expand its offerings to meet customer needs, rather than shoving a platter of specialized services under their noses, the bank wanted to find a way to introduce new products in a nonthreatening manner.
“We were sensitive to the fact that some of our loyal customers might see our expanding product offerings as an indication that Valley was morphing into something we’re really not,” says Durr. “Because we do understand the people we service, we wanted to respond to their growing needs, without sacrificing service.”
Enter Valley Notes, a breezy newsletter packed with employee profiles, new product information, financial tips and news about Valley Savings employees. The piece is mailed quarterly to the bank’s entire customer base and to 10,000 Cuyahoga Falls households which aren’t current Valley customers.
“It was a personal and sincere way of saying, ‘We really want you to know what is going on at Valley Savings Bank,’” says Durr, noting that the community warmed to the communiqu, which helped successfully introduce new services such as debit and credit cards, various checking accounts, investment accounts, home equity loans and Roth IRAs, among other products.
Virtual banking
As sweeping technological changes transformed many banks into robotic, faceless financial institutions in which computers call the shots, Valley Savings tapped into advanced technology while preserving its personal approach to banking.
Durr recalls that when the bank debuted “Valley Online” interactive banking in August 1999, she worried that some customers might think the new online product would distance them from Valley Savings.
“It actually turned out to be the great equalizer,” she says. “Now our customers have the ability to communicate with us via e-mail if they wish, pay bills — and not just utility bills — open accounts online, and even pay their taxes online.”
Durr refers to a link on Valley’s Internet site that connects users to Quicken’s TurboTax for the Web, which allows taxpayers to prepare and file federal and state income tax returns online using the same features and benefits as the Quicken TurboTax desktop software program.
“Throughout the process of developing and implementing our Web site, we were careful to always keep the customer as the focus in our efforts,” Durr says.
When Valley introduced business banking services in 1998, the mission was to mirror the mindset of business owners and meet their needs, one on one.
“When we started the business banking, it was well received because, boy, talk about people who need partnerships,” says Durr. “Small businesses have big-time HR and expense problems, and they need to know that they can come in, sit down and talk with someone to find solutions for their own challenges.”
Durr says business people were “blown away” when they realized the person who often pulled up a chair to brainstorm solutions with them was the bank’s president, Phillip L. First, who’s held the position since 1988.
First recalls meeting with a potential customer who compared Valley’s business banking services to those offered at another bank.
“They said, ‘Well, at this other bank, I have a personal banker. Who will I be able to talk to here?’ and I said, ‘That would be me.’ Then they asked, ‘Well, who are you?’ and when I said I was president of the company, they were shocked,” says First.
Banking on the bank
Durr says that Valley’s close affiliation with its customers allows it to be more flexible than larger banks. For example, when a customer applies for a loan, the bank factors in elements that computers won’t, such as personal relationships and reliability.
“We don’t hide behind a shroud here, and since our main decision-makers are onsite, it’s not like we have to call down to some other city to get a decision about something,” says Durr.
Likewise, customers value Valley’s character and track record.
“A lot of the reason people come to us for mortgage loans is because they know it’s not our practice to originate a loan, then sell it and stop servicing the customer,” she says.
Durr admits that Valley has sold some loans, but has retained the servicing.
“Customers still make their payments here and they can call us if they have questions. We make less money than if we sold that loan, servicing released. But we know that when banks do that, the customer feels betrayed, and the bank loses its credibility.”
That’s a lesson Valley learned the hard way when it initially ventured into the secondary market and sold a package of seven loans.
“Biggest mistake we ever made,” admits Durr. “It was good money, but when those seven customers called, they were hurt that we sold their loans. I still hear from a couple of them, and even though their rate is really good, the fact is, they felt betrayed.”
Durr says that Valley also clued into the fact that when many commercial banks all but eliminated passbook savings accounts to escape carrying accounts with small balances, those financial institutions missed out on opportunities to build long-term customer relationships.
“What they missed is the fact that about half those accounts were issued to children between the ages of 2 and 18. Recognizing that parents want to teach their children the importance of saving, we saw that as the perfect opportunity to define a product and possibly make a customer for life,” she says.
Consequently, Valley developed its “Pathfinder” youth savings account, with no required minimum balance. Durr is banking on the idea that young people will progress from Pathfinder to other Valley services as they mature.
“We have discovered during our own reinventing process that our diverse customer base defines what we are, and what we should offer,” she says.
High profile
One of the most difficult challenges to overcome in competing with Goliath banks, says Durr, centers on human resources and advertising budgets.
“There’s not a small business discount for marketing or advertising rates, and my budget for that is so much smaller than a larger institution,” she explains. “While we were tempted to jump at promotional advertising packages, we realized that we already knew who our customer was. So we decided to focus on how to
reach them most effectively.”
What resulted was a successful marketing strategy comprising targeted direct mail programs with timed offerings, inserts placed in daily newspapers and page-dominating ads in community newspapers.
“Using that formula, we were able to effectively reach our targeted audience in a cost-effective, measurable and controlled manner,” Durr says.
The bank also brings customers on board the old-fashioned way — by getting out and shaking hands in the community.
“Community involvement is of paramount importance to us. It takes a lot of time and commitment, but we immerse ourselves in community activities, such as benefit walks and food drives, and we encourage our employees to be involved with their communities by volunteering their time, whether it be with their churches or special projects,” Durr says. “When customers come in here and see people they see at their church or at the Acme, it brings a certain comfort level and credibility.”
Durr says it helps that her family and most Valley Savings employees reside in the Cuyahoga Falls area.
“Because we live and function in this community, we’re all working toward the same goal that’s important for growth.”
First agrees, saying, “To be a responsible corporate citizen, you have to be actively involved in the community.”
Durr says First is one of the reasons Valley is so actively involved in the city of Cuyahoga Falls, and nurtures relationships with the Cuyahoga Falls Chamber of Commerce and other organizations.
In anticipation of Valley’s 75th anniversary in 1998, First, Durr and Hunter brainstormed ideas to commemorate the event — something that would give back to the community while also bringing recognition to the bank’s milestone.
That’s when the annual pancake breakfast was born. Hosted each Memorial Day weekend by the bank and its employees in cooperation with the city and the high school, to date, at-the-door donations have reaped thousands of dollars to benefit Cuyahoga Falls High School music programs.
An honest dollar
In its quest to reinvent itself without becoming too big for its britches, Valley has successfully attracted new customers while retaining loyal ones, says Durr.
“Our employees still know the names of 90 percent of the customers who walk through the door, and that’s incredible,” she says. “It’s not easy to stay warm and welcoming while also becoming cutting edge to stay competitive.”
But Durr admits that Valley does have one thing in common with its competitors.
“I won’t say that we’re not in business to make money — because we are. But it’s to make an honest dollar, to be forthright, to tell the customer up front what to expect, to be a good listener and resolve a customer’s problem if they get something they didn’t expect.
“It sounds so corny, but it’s just honest business — and that really is what makes us different.”
How to reach: Valley Savings Bank, (330) 923-0454
The Valley girls
While attracting and retaining good employees is a major challenge for most businesses, Durr says that’s not an issue for Valley, where there’s minimal employee turnover.
While that’s partially due to an excellent employee benefits package, it’s primarily because the family esteems its 23 full-time and seven part-time employees as much as it values its customers.
“It’s such a warm and friendly environment, and Phil, David and I have a very open-door policy,” Durr says.
While benefits such as tuition reimbursement and 401(k) programs are pluses, Durr says little things, such as clothing allowances, mean a lot, too.
Durr explains that the bank provides employees with a budget to purchase coordinating suits. The employees mutually decide which outfits should be purchased and which should be retired. And weekly, each department creates its own “menu” of ensembles to be worn during the week.
“The employees love it because it’s a benefit to them, and it’s also sort of a marketing thing because when the employees go out together for lunch, customers who see them say, ‘Here come the Valley Girls!’” Durr laughs.