Danny Sikes traveled from Troy, Alabama, to Greenville, South Carolina, one weekend to visit his twin 6-month-old grandchildren.
He came back with lots of photos of the two boys, and some of the first people who wanted to see them were his friends at Troy Bank & Trust, his bank of 30 years.
“They know my children and grandchildren and always want to see the newest pictures of the grandchildren,” says Sikes, general manager of Sikes & Kohn Country Mall in Pine Level, just north of Troy. “I walk into the bank — not just me but any customer — and they know who you are. It makes you feel welcome. You’re not just a number.”
It’s that kind of customer service that is a hallmark of community banks, which are typically owned and operated locally and have fewer assets than larger megabanks. That’s not to say that those larger banks don’t have their own brand of customer service — it’s sometimes just not as personal as some customers would like.
“We really survive on that high level of service,” says Jeff Kervin, president and CEO of Troy Bank & Trust. “Obviously, all banks and credit unions have basically the same products and services. The service level is how you’re going to survive. Customers can always go somewhere for a better rate or more gadgets, but the relationships are how the smaller banks are going to survive.”
In many ways, community banks are just like their larger counterparts. Services are comparable, mobile banking is the wave of the present and future, and everyone in the industry is consumed by thoughts of how to keep their customers’ assets and information safe and secure.
“Even though we may not be on the cutting edge of technology, we must stay up with technology, and this means large investments into these products,” says Bob Dumas, chairman, president and CEO of AuburnBank. “That’s keenly important for us going forward. What’s critical is staying relevant in the payment system, whether it’s the debit card or credit card, and being sure your technology is such that it’s competitive.”
Dumas’ bank has been a fixture in Auburn since 1907, and though it has grown — now with eight branches in Auburn, Opelika and Notasulga — its core mission has remained the same.
“The bank was and is really community focused,” Dumas says. “We’re trying to help the local community, local government, citizens, consumers, university and city.”
Like other community banks, AuburnBank’s loans are largely business-related, from small businesses to rental properties to auto dealerships to hotels. The same is true in Troy, where although about 60 percent of their loans are consumer loans, dollars-wise the bank loans are 75-80 percent commercial.
“I look for that number to grow even more,” says Kervin, who became president in 2010. “They are typically involving small businesses, some commercial residential and the like. We do have a good manufacturing base here, too.”
Troy Bank & Trust began as an independent bank and will remain an independent bank, Kervin says.
Charles Henderson, Alabama’s only governor from Pike County, helped start Troy Bank & Trust in 1906. His foundation now owns 52 percent of the bank.
“One of the stipulations was that the bank stock Henderson owned never be sold,” Kervin says. “So we’re not strategically planning for five years, like some other banks. We’re strategically planning for the next 112 or 113 years. That makes it harder for us to raise capital. We can’t dilute his ownership.”
CB&S Bank, based in Russellville, has also been in the hands of one family for decades. It was founded in 1906, but in 1964, Cecil Batchelor joined the board of directors. Today, Batchelor is 93 and chairman of the board of the bank’s holding company; his family controls 60 percent of the bank and has overseen continuous growth.
“We’re a growing community bank,” says Mike Ross, president and CEO of the bank.
Like other banks, big and small, one of the biggest concerns Ross has for the future is safety — online safety, in particular.
“We spend a lot of money every year on security and firewalls to protect our customers and our shareholders,” he says. “It’s a big issue that we spend a lot of time on as a management team.”
Kervin sometimes loses sleep over it.
“Cybersecurity is the one that keeps most people awake at night,” he says. “It’s astronomically expensive, but you’ve got to pay for it to stay on top of it. When I got into banking in 1985, security was worrying about somebody coming in and robbing the bank with a gun. Now, they can rob the bank from another country.”
At AuburnBank, “safety is definitely of the highest priority,” Dumas says. “It seems almost daily you pick up the paper and there’s been a breach somewhere.”
That means that banks of all sizes are fighting the problems that come with new technology, while acknowledging that new technology is necessary to maintain and grow business. That’s a particularly tough situation for community banks, which don’t have as much capital as the much larger banks have.
“Millennials and young people don’t come to the bank like other generations, so we’re dealing with all sorts of technology today,” Kervin says. “Their phone is their bank. If you’re going to stay relevant, you have to do these things, and it’s very expensive to acquire the software and then to manage it. We’ve got to budget very carefully which one of these initiatives we can afford to do each year. Smaller banks are sometimes one or two generations behind in this technology.”
Ross agrees, saying that “technological advances in the banking industry are a big driver in our business.”
That includes everything from mobile apps, depositing checks via phone, ATM advances and more.
“We’re about to roll out our mobile wallet, which will allow people to use Apple Pay and their phone for paying for things,” Kervin says.
Keeping up with the larger banks in that regard isn’t easy, but it’s a necessity.
“There are costs that are not necessarily recaptured from the customers, but you have to do it to survive,” Kervin says. “You have to remain relevant to the younger generations.”
Still, these banks’ bread-and-butter will remain their personal service, something that Sikes relishes.
“I have my online stuff set up, and I can answer a lot of questions about our accounts without having to call the bank or go into the bank,” he says. “But I still go in on a regular basis. Some of the bigger banks seem more concerned about my deposits than about me. To me, community banks are interested in more than just my deposit.”
Alec Harvey and Julie Bennett are Auburn-based freelancers for Business Alabama.
