Brandon — Days before Community Bank officially celebrated its 100-year anniversary November 8, Tom Colbert and Freddie Bagley were ribbing each other about who delayed the growth of the Brandon-based bank.
“We should’ve been in Rankin County about five or six years earlier,” admitted Bagley, president and CEO of Community Bancshares of Mississippi Inc. “Tom wanted to come, and I and another guy questioned whether we were ready, but Thomas was right.”
Colbert, chairman of the board of Community Bancshares of Mississippi, who has been with the bank since 1968, joked, “We were just slow learners!”
In 1905, 42 stockholders with $20,000 established Community Bank in the small timber community of Forest as Farmers and Merchants Bank. For nearly 90 years, it remained a one-bank company.
In the late 1980s, Community Bank leaders were faced with three distinct challenges: how to create big-bank services and economies of scale while maintaining the advantages of being a true, local community bank; how to find an innovative way to continue to push improvement in customer services; and how to compete with the aggressive brick-and-mortar expansion of competitor banks.
“Up until then, all you had to do was to be the best-liked and make sure you knew everybody,” said Bagley, who has been with the bank for nearly three decades.
Community Bank established separately chartered banks that operate independently but share services within a common holding company. The structure allowed Community Bank to pool resources and empower local decision-makers.
“This model does two things: it makes bank presidents accountable and teaches them how to be leaders,” said Bagley. “If you can keep leadership close and continue to go up, you’ll be able to grow and expand.”
As a result of this model, Community Bank has never had a losing month, a losing quarter or a losing year. The stock value has grown every year, doubling every five years for the last two decades. Only once has its lead bank made less than a 15% ROE (return on equity), when it slipped to 14% in 1986.
Today, Community Bank is one of the South’s fastest-growing financial institutions and one of Mississippi’s fastest-growing private companies. In just over a decade, it has grown from $200 million in assets and a couple of offices to almost $2 billion in assets and 32 offices. Over the last five years, while many corporate banks have expanded their portfolios to include insurance, stock brokerage and real estate services, Community Bank has focused on proving that there’s a sweet niche for plain “vanilla” banking — simple deposit and loan services.
“We could’ve grown much faster if we’d gone public,” said Colbert. “We were told by investment bankers seven or eight years ago that they’d take us public and raise us a great deal of money to buy other banks. We could’ve built a $10-billion bank, but we chose to remain private. Officers, directors and staff own 80% of our stock.”
Even though employee ownership has been a factor, Colbert said treating people fairly has been the secret to the company’s low employee turnover.
“Our whole philosophy is to be fair to everyone throughout the system,” he said. “We’ve always had a policy that if there was a conflict between the bank and staff, and it could go either way, we always resolved it for the staff member.”
Days after Hurricane Katrina damaged Community Bank’s five coastal offices — none seriously — Bagley and Colbert were on the Mississippi Gulf Coast handing out supplies of gasoline, water, ice and canned goods.
“The number one thing on our minds was seeing about our folks,” said Bagley. “The second focus was our customers. We were fortunate that every single one of our staff members came back to work. That may be the most important statistic of all.”
Community Bank expanded to Memphis earlier this year and is planning a new division in Florida in early 2006.
“We’re in every major market in Mississippi, so if we’re going to continue to grow at our rate of the last 10 years — our assets have grown 16.25% annualized and our profits have grown at a 19% annualized rate — we knew we had to look at growth markets,” said Colbert. “Our greatest challenge for the future is to keep getting better at what we do. We’re a bank for the hometown … for Main Street customers, not Wall Street customers. We do plan to grow, but our philosophy will not change. We’ll just be the community bank for more hometowns.”
Contact MBJ contributing writer Lynne W. Jeter at email@example.com.
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