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Teaching the Art of Community Banking

By: Bill Poquette

Their strategies couldn’t be more different. Charlotte, N.C.-based Bank of America lost interest in a group of 29 branches in smaller markets in faraway Southwest Missouri and Southeast Kansas. Arkansas-based Arvest Bank saw opportunity there.

With the opportunity came the task of instilling the acquired branches with solid, traditional community banking principles. Arvest, based in Fayetteville, Ark., has $14 billion in assets and 260 locations in Arkansas, Kansas, Missouri and Oklahoma. With numbers like that it may not look like a community bank, but it walks the walk. It began in 1961 as the Bank of Bentonville, Ark., with deposits of $3.5 million, and operates today through 16 locally managed community banks. By comparison, Bank of America is 100 times bigger, with assets of $1.4 trillion.

And Arvest is steeped in community bank theory and practice, as is Bill Lee, a third-generation Southwest Missouri banker who, until retiring at last year-end, had an important role in applying these principles in several of the acquired branches. Former colleagues still involved in that effort include Rebecca Dunham, sales manager and executive vice president, and Amy Howe, marketing officer.

Lee’s family previously owned banks in Neosho and Seneca, Mo., and Nowata, Okla. During his 50-plus years in the business – the last six with Arvest -- he also managed two banks for other owners. Dunham has been with Arvest for more than 24 years, and Howe, who has been with the organization for three years, was previously with a small bank in Arkansas. They are managers in Arvest’s Joplin region, which operates through 17 locations with combined assets of more than $600 million.

The seven acquired branches they are responsible for are in Joplin, Lockwood, Monett, Carthage, Nevada and Neosho, Mo., and Pittsburg, Kan. Joplin, population 50,000 is the largest market; Lockwood, population 900, is the smallest.

Arvest, whose chairman and CEO is Jim Walton, son of Walmart founder Sam Walton, works hard at being a community-branded bank, according to Dunham. This has been a welcome change for the former Bank of America staff members who stayed with Arvest.

“They were accustomed to being part of a very large national bank but weren’t always able to have that community focus,” she said. “We found that these folks really wanted to be involved in the community and wanted to do something at the football game on a Friday night and show the community they are part of it. They didn’t have that kind of leeway in the past and it’s a very big emphasis with Arvest.”

From a marketing standpoint, Dunham noted that whether a customer is in rural Missouri or Dallas, Texas, he or she needs a certain amount of flexibility. ”They want to be mobile and use their phone or laptop to access their banking,” she said. “But at the same time they want to be able to walk into a branch to get specialized services and a high level of expertise. I think that is one of the big differences that we’ve been able to bring with our new branches. Although Arvest is still a good-sized organization at $14 billion, our delivery method is still very much a community bank delivery method.”

The previous delivery method was to offload the lending function to service centers around the country, Dunham explained. “If a client came in and needed a home loan or a car loan, they were redirected to the phone or online option for delivery,” she said. “They didn’t have a way of processing that in the branch.

“It is really different for Arvest,” she continued. “We have that loan presence in all of our branch locations and the ability to field applications and get the business done directly with the customer at that level.”  

Another of the significant marketing challenges for Dunham and Howe was the diversity of the markets served by the branches. “I think it is very important for us that we understand that each market has its own particular flavor,” Dunham said.  “Some of the communities that we’re in now are much more rural than what we’ve been in in the past, so we might choose a different way to market the bank in those communities.”

Dunham and Howe concede that being part of the larger Arvest organization, they have resources that might not be available to smaller banks, or even to a $600 million community bank. For example, “From a compliance standpoint they help manage that process because there is so much more tracking and all of that accountability that comes into play with a marketing piece,” said Dunham. “It does help to have resources like that.”

But when people come into the bank, “You want to have that community bank focus,” said Dunham. “That’s one of the things we work very hard on. We want to have a very consistent experience so that if a customer walks in to branch in Nevada, Mo., or one in Fayetteville, Ark., we want them to find welcoming, knowledgeable associates with a wide variety of banking services to meet their needs.”

Dunham pointed out that the commercial lending group replicates much of what she does with the retail group. “That means helping the lender understand that his or her job is to go out and uncover that business, to be that local resource for lending needs, whether it is for real estate, C&I or anything of that nature.” They are working to brand that, she explained, because that was not the emphasis at some of the locations.

Until he retired, Bill Lee was part of that effort. His responsibilities included helping to build market share in the various communities by calling on prospects and teaching the Arvest culture to the former Bank of America associates. “It was the complete opposite of what they were used to,” he said. He called on trucking companies and manufacturers in the area and he liked that he could offer whatever a larger regional or national bank could. “We’ve got the products, we’ve got the knowledge, we’ve got the service ability and we’re local,” was his story.

Ironically, the Lee family has a bit of history with the Walton family.

Years ago, when Sam Walton wanted to buy a second Ben Franklin store before launching Walmart, “Nobody in Arkansas would loan him money,” Lee related. So Walton and a friend in the Ben Franklin business approached Bill Lee’s father at his family’s bank in Neosho and he loaned Walton $25,000 to buy the second Ben Franklin store. Later, when Lee’s father retired and moved to Bella Vista, Ark., Walton asked him to serve on the board of the Bank of Bentonville, which he did for six years.

Has being a community bank changed in the decades since? “If it did, we’d lose our focus,” said Lee.

Bill Poquette is editor-in-chief of BankNews magazine.

Copyright (c) May 2014. BankNews Media.