A Note from our CEO, Scott Soderberg

I am programmed to perk up whenever I hear or see another bank or financial institution say or print “community” in their ads. In fact, I notice when any other type of business advertises using that word. You don’t have to be a marketing genius to know that “community”-related claims are effective sales tools. That is, of course, because all of us identify with community-related connections in our own lives, which are almost always positive experiences.

What does it really mean to be a community bank? My grandfather Henning Soderberg would often say that true community banking “is a two-way street.” He would explain that the entire local population benefits from what community banks do, not just the customers of the bank. Lending to area businesses provides the capital to start or expand operations in the community, enabling them to pay the citizens whom they employ, and to fund the innovation and production that satisfies the local demand for goods and services that may otherwise only be available elsewhere. The businesses reinvest their profits to expand their assets and workforce, buy materials and services from local manufacturers and shops, and become involved in community affairs. Their employees are also consumers who leverage their wages to buy goods and services at those very same businesses and build or buy homes in the area with the help of bank mortgage lending. The products they produce enable the population to shop locally. It’s not hard to see what economists call the “multiplier effect” that results from this cycle—the value of the local economic activity produced is many times the amount originally borrowed.

But the part you don’t usually hear (the other side of the street) is that true community banks need local residents and businesses every bit as much. They exist because they are simply another local business. They need the community’s deposits, which they in turn lend to business and residents. Their business plans are, by definition, laser-focused on community development because the success of the bank is entirely dependent on the growth and well-being of area businesses, their employees, and residents. April is the “Power of Community Banking” month. You know you’re working with a true community bank when ALL the decisions are made locally, when you can talk to a banker personally any time you need to, when the employees know you personally, and when you see the bank’s employees at a community meeting, event or celebration. We live here, we will do everything we can to help you succeed financially here, and we know how important you are to both us and the community. So the next time you see a multi-billion dollar national or regional bank or other non-bank financial institution claim they are a “community bank”, I hope you find yourself chuckling a bit. 😊