How North Bay community banks adapt to shifting business environment
Community banks, unlike their bigger counterparts, have to stay on their proverbial toes in a business climate filled with change and uncertainty. How can these banks manage challenges, the regulatory environment, new tax cuts and constant technological advancements?
The Business Journal went directly to the source to find out. The following Q&A includes comments from three presidents and CEOs who run smaller banks in the North Bay: Jim Brush of Summit State Bank, Khalid Acheckzai of Poppy Bank, and Russell A. Colombo of Bank of Marin. Some comments have been edited.
What is your bank’s No. 1 challenge?
JIM BRUSH: Balancing needs. We are growing quickly, which takes extra effort from our exceptional staff, finding time to meet all of our customer needs, funding our local growth with local deposits, and maintaining a solid community bank profile. We are committed to our employees, community, and shareholders to provide exceptional experiences.
KHALID ACHECKZAI: It would be difficult to pick one. Cybersecurity is a big risk that most businesses, especially financial institutions, are faced with. Also the regulatory environment. The instability in the interest-rate environment and the recent inverted yield curve are also challenging for the banking industry.
RUSSELL COLOMBO: There really is just one principal challenge we continually face: attracting and retaining talented people. In our 29-year history, we have built a high-caliber team of talented, committed, experienced bankers. As we grow, we constantly strive to hire candidates that are a complement to that team. Finding people who are a fit, not only professionally but as part of the Bank of Marin culture of legendary service and community commitment, is our greatest challenge — and one of our biggest accomplishments.
Are there services your bank can provide better than big banks? If so, what are they, and why can a bank of your size excel in that area?
BRUSH: Yes, in just about every area except technology and consumer lending. Technology for smaller-sized banks is expensive and, often, purchased through a third-party, whereas larger banks have bigger budgets and often in-house staff to create proprietary software, giving them greater flexibility. We are focused on serving the business community and prefer to not compete for consumer loans as there are many local consumer-lending institutions that do it well.
We are a relationship bank, focused on knowing our customers, calling them by name and helping them with the services they need. We consider their overall relationship, and our services are generally better and less expensive than a big bank (that) tends to be focused on how much they can make from each account. We provide lending solutions tailored to individual needs, not out of a box, and decisions are made locally by experienced lenders.
ACHECKZAI: I would say we can provide most services better than big banks — that is both on the lending and deposit sides. A bank (of) our size can excel in these areas, as we don’t have the number of layers that the big banks do, and (we) are closer to our clients and their financial needs. We can listen to them and make decisions quicker to meet their expectations and timelines.
COLOMBO: The foundation of our strategy is consistent credit and expense management, adherence to our relationship-banking model and commitment to the communities that we serve. These disciplined fundamentals lead to quality organic loan and deposit growth, strong credit performance, and steadily increasing market share.