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Local bank market share: personal service, part of community

A sampling of small local banks around the state say they have no problem holding on to market share in the competitive world of larger statewide and regional banks. There are recurring themes from the four community bank presidents who spoke with the Mississippi Business Journal. They all say banking is definitely a people business; they believe being a part of the communities they serve is vitally important; and their banks have built solid relationships.

Another important characteristic they share is the longevity of employees. The average length of service is 20 years. That stability, they feel, adds to the confidence customers have in local banks.

These four banks also have history on their side. The youngest is Merchants & Marine Bank, established in Pascagoula in 1932. The oldest is RiverHills Bank, chartered in 1890 as Port Gibson Bank, followed by the Bank of New Albany that was begun in 1896 and the Bank of Anguilla, started in 1904.

The Bank of Anguilla is the only bank in the two-county area of Sharkey and Issaquena counties, but president Fred Miller says he still competes for loans with lending institutions and for other banking services with anyone who can pick up a newspaper.

“As for marketing, I think our reputation speaks for itself,” he said. “The bank has been here through good and bad times. People know they can count on us and the services we provide.”

Miller says the Bank of Anguilla doesn’t need bells and whistles, but they do advertise in the local newspaper and use direct mail to keep customers informed. Contributions are made locally where the bank feels they get the most bang for the buck.

“We expect to stay a community, home-owned bank. We take orders from the people in Sharkey County,” he said. “We see our customers at Little League games, church, meetings, shopping and playing golf. Everyone knows each other and that’s our strength.”

The bank serves the largely agricultural area. Five of the seven directors are farmers and the other two are in farm-related businesses. “That’s our niché and we relate to the agricultural economy we have here,” Miller said. “We will stick with the farmers and keep doing what we know and do best.”

Bank of Anguilla has branches in Rolling Fork, Cary and Myersville.

With assets of $320 million, Bank of New Albany has over 70% of market share in Union County, according to bank president James Collins.

“Success is based on the people working for us. Most of them grew up here,” he said. “We have a great staff and officers, and we find that customers want to bank with people they’re comfortable with and know.”

Bank of New Albany has 10 loan officers, and with two competitors is the largest bank in town. Some of these officers have been with the bank over 30 years. “We’re good on loans — charging a little less than our competitors — and pay a little more on deposits,” Collins said. “We’re matched up in pricing and it works for us.”

This Northeast Mississippi town near Tupelo is strong in furniture manufacturing, the service sector and the medical community, and has a good average income. Collins says he is thankful for the growing economy. The marketing budget is primarily spent with the local newspaper, radio stations and billboards. The bank also sponsors local athletic and other events of special interest.

“We find that people flip through a daily paper but read the local paper from cover to cover,” he added.

Collins is pleased that Bank of New Albany was among the top 20 banks in the U.S. in its peer group last year for return on average assets, a measure of a bank’s efficiency.

The Merchants & Marine Bank is headquartered in Pascagoula and has 11 branches throughout Jackson and George counties.

“We’ve grown market share by giving good service and paying attention to the needs of our customers,” said president Royce Cumbest. “We cut the red tape that customers might run into with larger banks. If we can make the process easier and less time consuming, we do so.”

In 2001, going against the trend, Merchants & Marine Bank bought branches in Lucedale and Moss Point from a larger regional bank instead of vice versa. “It’s hard for large banks to pay detailed attention to branches and these locations were already close to our trade area,” Cumbest said. “These bank employees stayed and the customers didn’t see any difference in service.”

Merchants & Marine Bank closed 2004 at $311 million, with 78 employees and with the construction of a new headquarters facility underway in downtown Pascagoula. The president says the bank is big enough to accommodate any loan needs customers have.

“Size is sometimes important for that reason,” he said. “We have a strong economic base and a strong public/private economic development organization that has been successful. It’s diversified but unified.”

Cumbest and Fred Miller serve on the board of the Mississippi Bankers Bank, an organization that works like a cooperative for small banks. “It has really helped community banks in the state,” Cumbest said. “Other state are starting them, too.”

In Port Gibson, the venerable Port Gibson Bank changed its name to RiverHills Bank in 1999 with the opening of two branches in Vicksburg. Fourth generation banker Robert Gage IV, is chairman of the board and says the name change better reflects the two communities the bank serves.

“We maintain market share by offering personal service,” he said. “Loan decisions are made locally, not states away. We offer flexibility and can tailor our services to fit the needs of customers. People like that.”

In addition to traditional services, RiverHills now offers Internet banking to keep pace with the ever-increasing computer sophistication of customers.

Gage says the bank has had overtures from large banks, but RiverHills is not interested. “Everybody may not want to use a community bank, but RiverHills Bank will keep on doing what we’ve always done well. It’s service,” he said. “There’s no secret to it.”

Contact MBJ contributing Lynn Lofton at mbj@msbusiness.com.


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