Banks focus on building relationships with business customers
For most banks, lending is all about the numbers.
If a customer has the right credit score, good financial records and a believable plan, the bank is interested in doing business. If they don’t, well, no dice, particularly in this economy.
Some banks are going beyond the numbers to develop long-term relationships, digging deeper to make sure business customers are doing all they can to survive the turbulent economy. It’s a long tradition among community banks, which focus on serving businesses, consumers and farmers in their local market areas.
The extra attention ranges from financial checkups or priority-setting sessions at Commerce Bancshares Inc. and National City to Enterprise Bank & Trust Co.’s college-style courses.
Sandy Washington, senior vice president of small-business banking at Commerce, said the bank has been doing its checkups for years, but customers are more receptive to them in the current environment.
"The more we understand what their goals and their objectives are, the more we can help them," Washington said.
Rick Sems, Missouri banking president for National City, said building relationships with business customers is nothing new for the bank. Twice a year, customers have a business priority agenda session with an account manager, a local branch manager and a cash management officer.
Jim Watson, president of Midwest BankCentre, said the bank also does checkups and sponsors regular gatherings with speakers who can help customers understand the economy.
"Communications is a mutual responsibility," Watson said. "Even our customers today are very concerned about how their bank is doing."
Kevin Eichner, who retired as chief executive of Enterprise Bank in May to become president of Ottawa University, said the bank started Enterprise University to give its business customers a chance to continue their education in a way that fit their schedules and their budgets.
"It’s part of a consultative approach" at Enterprise, said Jerry Mueller, the bank’s senior vice president of marketing. "The idea is, we want to partner with our clients and help them be more successful."
On a recent Wednesday morning, 20 executives sat at tables scattered around a classroom in an industrial building in Olivette.
Lori Lewis, Enterprise’s director of organizational development, was leading a class on "Managing Your Energy," based in part on "The Power of Full Engagement," a book by Jim Loehr and Tony Schwartz.
For nearly three hours, Lewis led the executives through exercises designed to help them manage their business and personal lives more effectively. Lewis, who has a doctorate in organizational psychology, sprinkled her lecture with a clip from National Public Radio, a Power Point presentation, handouts and a Sudoku puzzle.
Classes at Enterprise University range from marketing, sales and financial management to leadership effectiveness and personal financial planning. Some are taught by bank executives like Lewis or Stephen Marsh, the bank’s president. Other teachers include lawyers, business consultants or experts in things such as energy conservation.
The classes are open to anyone with an interest in the topics covered. There is no charge, and it’s up to attendees whether they’d like to be contacted by the bank after the class.
Kay Erb, registrar for the classes and a member of the bank’s marketing department, says between 300 and 500 people attend Enterprise University classes every semester. About 80 percent are presidents or top managers of their companies.
Jeffrey Jappa, president of JMC Manufacturing in Bridgeton, said the classes gave him a good introduction to the bank. He had been considering changing banks after he bought the wood products company from his father absolutely free credit report.
"Other banks sponsor seminars," Jappa said, "but not one that’s really put together like a university with a course load that’s really targeted to the small-business owner. Even though I was already interested in the bank, there was no selling whatsoever."
Jappa has since become an Enterprise customer, and likes their approach.
"Other banks just let you run, and you only hear from them when things are going wrong," he said. "My account manager is very interested in my business. He’s worked hard to create compliance targets that are reasonable and can be attained."
Mueller said Enterprise University has been a great way to set the bank apart.
"It enhances the relationship," Mueller said. "We can help (customers) improve their skills and show them ways to make their businesses more efficient."
Commerce Bank’s financial checkups include an hour-long meeting to review financial statements. Customers are encouraged to bring their tax advisers along. The bank may ask about the customer’s goals, the ways they’re collecting receivables or managing cash. Personal finance can be on the agenda as well.
"We always have an open door," Washington said. "We encourage our customers to meet with us regularly. As economic conditions change, so does the bank’s appetite to supply credit to particular businesses."
Washington said the bank recently worked with a family-owned bakery facing a downturn in its business because of a decline in the market for sweet goods.
"We sat down with the family and provided some reality checks," Washington said. The bank was able to help the business improve its collections and worked with an accountant to help the bakery manage its finances.
At National City, the agenda-setting sessions range from reviews of financial statements to discussions about cash management. Small-business customers’ personal wealth often is tied up in the company. Owners need to make sure their families are protected while they run the business, Sems said.
The bank has had to get more creative on loans lately, tapping Community Development Corp. programs and working with business development groups to arrange financing or equity injections, he said. Recently, customers have been more concerned about how their accounts are titled to ensure that they have the maximum insurance from the Federal Deposit Insurance Corp.
"I really try to push that what we’re trying to do is advise, not prod and poke so much," Sems said.
Wayne Kissel, owner of K1 Creative, a design firm in Eureka, said sessions with his National City banker have shown him how to protect assets, change investment strategy and handle employee benefits. Kissel said he went with National City after looking at proposals from six different banks.
"My personal lender has been down to earth and easy to work with," Kissel said. The bank was instrumental in helping the business build its own building after years in less desirable rented space.
Bankers have to be careful about how much advice they give because of potential liability if a customer feels he or she was pushed to make a decision that turns out badly, said Rick Palank, senior vice president for finance at the St. Louis County Economic Council.
Palank said it’s rare for banks to go beyond the numbers, especially now.
"They’re very, very conservative now," Palank said.
jerristroud@post-dispatch.com
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