Who were ICBA’s Top Lenders of 2022? – Independent Banker

The Peoples Bank helped the Jones family of Legacy Dairy in Hiseville, Ky., relaunch their business. From left, Ally Jones; bank chairman, president and CEO Terry L. Bunnell; and Doug, Genelle and Jagger Jones. Photo by Linkes Photography

Last year, community bank loan producers were faced with both record-low interest rates and a glut of deposits. But as they always do, they came through for individuals and businesses in their communities with a combination of personalized service and prudent risk management practices. Here, we highlight some of last year’s most successful loan producers in the areas of agriculture, commercial and consumer/mortgage lending.

By Ed Avis

AGRICULTURE

When the owners of a small family dairy asked The Peoples Bank in Marion, Ky., for funding to reopen the business after years of inactivity, chairman, president and CEO Terry L. Bunnell listened. He sensed the family’s passion and liked their idea of starting with selling milk at farmers’ markets, roadside shops and small grocery stores. Another bank might not have taken a chance on them, but The Peoples Bank did. That was about four years ago; today, the dairy is successful and growing.

“We worked with them with loans to buy equipment and vehicles for delivery and the beginning operational cash needs of the business,” Bunnell says. “The passion they brought to the business is what we’re all about. We want to help people succeed and grow a business, help them accomplish what they’ve set out to do.” Bunnell’s relationship with the dairy owners is not unusual. He attributes the agricultural lending success of The Peoples Bank—a $114 million-asset institution with a loan portfolio that is about 25% ag related—to its one-on-one connections with borrowers. Those relationships show the borrowers that their bank cares about their businesses and wants to help them succeed. In return, those relationships help the bank grow.

“I believe you have to interact with your customers on a regular basis,” Bunnell says. “You’ve got to engage with them to understand their needs. I believe a mistake that is often made is that we assume all farming is the same, and it’s clearly not. Our customers have different needs, and we have different ways to solve those needs.”

Terry L. Bunnell of The Peoples Bank worked closely with Doug and Ally Jones of Legacy Dairy.

Close-knit relationships

Connections with borrowers has also played a key role in the success of $457 million-asset First Southern Bank in Florence, Ala. However, First Southern’s ag lending also benefited last year from the addition of three loan production offices, says Joe Beaver, the community bank’s president and CEO. The bank, which attributes 31% of its loan portfolio to agriculture, opened loan production offices (LPOs) in Mississippi, Florida and Alabama.

“We identified areas that we feel like are a good fit for us and what we do, and we identified the right lender in those areas,” Beaver explains. In each new market opened in 2021, the community bank found an experienced ag lender who was seeking a new position.

Another element to First Southern’s ag lending success is its robust crop insurance business. The bank provides crop insurance to farmers in 11 states.

“Being in the crop insurance business lends significantly to our understanding of ag lending,” Beaver says. “It also indirectly benefits our lending business. Because of our crop insurance business in Florida, I met an experienced ag lender, and circumstances worked out that we had an opportunity to bring him on board. And in New Albany, Miss., the person who led our crop insurance group had previous experience as a lender, and he moved back into that role when we opened the loan production office there.”

First Southern’s new LPOs have pumped up the community bank’s ag portfolio, but, like Bunnell, Beaver knows that it’s ultimately the relationships with farmers that lead to lending success.

“It’s about understanding what the farmers need, building those relationships, building that trust and standing by them when the times get tough,” he says.

Lead Bank takes the lead with, from L to R, president and COO Greg Bynum; VP and associate general counsel Shakita Miller; EVP, general counsel and chief risk officer Julie Pine; CEO and vice chairman Joshua C. Rowland; and EVP and chief technology officer Mike Beattie. Photo by Steve Puppe

CONSUMER AND MORTGAGE

One of the missions of Lead Bank in Lee’s Summit, Mo., is to help consumers who have difficulty accessing the financial system, especially those who have been historically marginalized. So, when the community bank’s leadership learned of a fintech that needed a bank partner to launch a credit-building tech product, they were intrigued.

“Our CEO, Josh Rowland, went to a meeting of the Financial Health Network, an organization that helps consumers improve their financial health, and they said, ‘We should introduce you to this fintech who has this product and needs a partner,’” says Greg Bynum, president of the $738 million-asset bank.

That meeting four years ago led to the launch of Lead Bank’s Credit Builder Account program, which is accessed through an app developed by Self Financial, a fintech. Self Financial handles the technology, including access to online accounts and an app, as well as marketing aspects of the program, and Lead Bank provides the compliance and access to the banking system. It is available to consumers in all 50 states.

Why did this program help propel Lead Bank onto Independent Banker’s Top Lenders list? Because the Credit Builder Account program begins with a $1,000 loan to the consumer, which is deposited into a certificate of deposit at the community bank instead of being disbursed to the borrower. The borrower makes monthly payments over the course of 12 months. Assuming the borrower makes the payments on time, they end the year with an improved credit score and $1,000 in savings.

“In our four-year relationship with Self, we’ve helped in excess of a million consumers establish or improve their credit scores,” Bynum reports. “We’ve been really happy with it. It’s a way to help consumers get access to financial services in a financially responsible way. Some banks see fintechs as competitors, but if you can combine the strengths of the banking industry and the strengths of the fintech, it can really be a win-win.”

Two years ago, Lead Bank and Self expanded the program to include a secured credit card. Since the successful Credit Builder Account participants end the program with $1,000 in the bank, they have the cash to secure the card. More than 500,000 customers have received secured cards through the program.

At left, Lead Bank’s CEO and vice chairman Joshua C. Rowland with Greg Bynum, president and chief operating officer. Photo by Steve Puppe

Taking the lead on financial literacy

Teaching people about wise money management is a key part of the Credit Builder Account program, Bynum says. “We do a lot of financial education to help consumers know what behaviors help their credit scores. For example, if their outstanding credit card balance gets above 30% of what’s available, that tends to hurt their credit score, so we send a little notice that says they may want to pay it down.”

Self and Lead Bank will probably add more banking products in the future, but they are not rushing things.

“We’re being very methodical about what products we introduce,” Bynum says. “We’re surveying consumers about what they need; that’s how we came up with the secured credit card. It’s important for us to do it in a financially responsible way so that we’re always helping the consumer develop good financial habits and improve their credit.”

COMMERCIAL

“Doing well by doing good” could be the unofficial community banking motto. But in the case of $163 million-asset New Haven Bank, in New Haven, Conn., it is particularly apt. The community bank has succeeded while lending to nonprofits, mom-and-pop businesses and many other clients not well served by megabanks.

New Haven Bank is a Community Development Financial Institution (CDFI), meaning that at least 60% of its business must be conducted in low- to moderate-income areas. And it is the only locally owned bank in the city.

“We serve a market that the larger financial institutions really don’t serve well,” says Maureen Frank, the community bank’s president and CEO, adding that its average loan size is about $400,000. “We’ve really developed a sweet spot.”

She explains the bank has focused on serving New Haven’s underbanked community since it was launched in 2010 after a mutual savings bank in town went public and was absorbed by a larger institution.

“When that happened,” she recalls, “the former mayor of New Haven challenged the CEO of that institution to set aside funds so that a community bank with mission-driven objectives could be formed. So that’s where the capital to start New Haven Bank came from.”

L to R, New Haven Bank’s Tom Whitbread, William Hice, Maureen Frank, Iris Velazquez, Michael Aquilino and Richard Venditto focus on serving underbanked communities. Photo courtesy of New Haven Bank

PPP for the people

The Paycheck Protection Program (PPP) was important to New Haven Bank’s success in 2020 and 2021. The community bank netted $32 million in loans those years, including about 200 loans in 2021 for $21 million.

“We lent to retailers, restaurants, nonprofits, small mom-and-pop stores, barber shops, beauty salons, day cares, churches … we did not turn anybody away,” Frank says. “We embraced the spirit of the PPP and handled anybody who came our way. More than half of our loans were to noncustomers.” She says that a third of the noncustomers commented that their current bank at the time either would not give them a PPP loan or would not help them with the process. In contrast, New Haven Bank expended energy making sure all of them were served.

“We spent a lot of time with small businesses whose finances might not have been very sophisticated,” Frank says. “For some of them, their payroll was just a checkbook register.”

Attention to detail

That kind of close attention is part of the community bank’s normal routine. For example, to better serve nonprofit clients, New Haven Bank works to understand the business models and funding sources of each. That diligence pays off: Frank says the bank has not had to deal with any delinquent loans among its nonprofit clients.

The future looks bright enough that New Haven Bank is currently seeking locations in two nearby towns, West Haven and Hamden.

“We’re excited about expanding,” Frank says. “We’re one of the very few banks that received a charter after the financial collapse in 2008, and we’re still going. Any de novo is a challenge, but it’s been rewarding, and I think we’ve helped a lot of people and hope to continue to do that as we grow.”

Ed Avis is a writer in Illinois.