One-branch banks find advantages to their size - St. Louis Business Journal:

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Wall Street’s financial fallout has helped St. Louis community bankds with only one location bettet compete against the giants with thousandsof “In today’s world the big banks are seen as potentiallyg more risky than smaller community said Jim Regna, chief executive at 18-employee . “We’ree seeing more opportunities toprovide financing.” Technologuy has made it easier for communituy banks to compete without needing numerous locations. Customerss can use online banking and remotedeposif scanners, which can combat the advantag e larger banks gain by having numerousw branches.
“The argument minimal-location banksz make is: Why spend the money on bricks and leases and salary dollars when we can delived everythingthrough technology?” said Mike Flavin, presidenf of . In recent years, community banks have begu n providing free ATM use and reimbursing customerss for using cash machines ofother banks. Regnaq said that approach is less costly for his bank than installingt and maintaining the machines or joining an ATM Small banks do havecertain challenges, namelh an inability to make sizable loans.
Many target individuald and businesses with annual salesbelow $50 Flavin of the 70-employee Business Bank, which targetds businesses and wealthy individuals, said one of his bank’a biggest challenges is finding deposits. “As opposed to attractinf depositorswith locations, we employg specialists who do nothing but seek out depositors,” he The bank does little advertising, but relie on board members and existing customers to refer them to potential Because its overhead is often less than banks with multiple Flavin said the bank is able to pay a highef interest rate.
Another challenge small banksa confront is how to deal with customerws who need to makeregular cash-onluy deposits, such as retailers. Those types of customer often prefer banks with several locations sothey don’ty have to drive far with a lot of cash. Havin g just one location doesn’ t guarantee a bank will avoid the troublee faced by others in the industryright now. In the issued a cease and desistg order against in Chesterfield to halt unsoundbankinvg practices. WestBridge overhauled its management, sold foreclosed real estate andraisedf capital. The FDIC gave in Sappington a similar cease and desisrt orderthat month.
The bank has brought in new revamped its business model and attracted anadditional $5 million in Tony Feraro, president of Concord Bank, said the bank is focusedc on “getting our house in order,” but he sees plentyt of possibilities ahead. “The small community banks, I believre in all honesty, have nothinyg but opportunity in frontof them,” he said. Bank consultantg Dan Hogan has provided consulting services to both Ferario and The Business Bankof St. He said even thoug there are numerous one-location banks, the vast majorithy don’t plan to stay that way. The successful ones sticjk to proven small-bank marketing strategies.
“They know their depositors and lenderw on apersonal basis,” Hogan “They rely heavily on their board of directorz for marketing and referrals. Their marketing effort is a littlemore homegrown.” Regnsa said Triad eventually will need to expand beyondr its one location in Frontenac to keep up with Even so, he said Triae is not focused on having lots of Feraro wants to eventually add locations and acquirew other banks in the asset range of $50 million to $100 million. “The big national banksd think the more customer traffic they themore it’s goinb to cost,” he said. “We want people in the It’s a completely different model.
We want to toucyh flesh.”