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When opening branches, critical factors come into play

There’s a lot of movement among banks as branches follow population patterns and new markets to grow their business. Decisions of where and when to open new facilities are based on sound business principles. Sometimes even a name change is warranted.

That was the case for Sycamore Bank, formerly Senatobia Bank, a community bank that was established in 1900. In 2005 when the bank decided to move into the booming Southaven area, the name was changed to better reflect the broadened scope and range. It was thought that customers in other towns would not want to use a bank with the name of another town. However, the bank remained true to its heritage. The word Senatobia is an Indian name for white sycamore tree, and the bank’s logo is a sycamore tree.

“The Tate County (Senatobia) market is not experiencing the growth like DeSoto County. The bank is growing faster than the area,” said David Dowdle, bank president and CEO. “We knew we would have to go out of our geographic footprint to expand. Many of our customers work in Memphis and drive through Southaven.”

The bank did a feasibility study to help with the Southaven site selection along with meeting with local officials and economic development professionals.

“Oddly enough, the site they recommended at the intersection of Getwell and Goodman roads is the same site picked by the study,” he said. “There’s a lot of traffic there and a strip center, a grocery store and other retail were being developed there. Also, we knew Getwell Road was being widened.”

Dowdle compares the busy Southaven thoroughfare with County Line Road in Jackson, noting that the North-South corridor of Getwell Road works best for customers driving from Tate County to the Memphis area. The branch opened in July 2005.

“It just made perfect sense for us, and after one year there, we can say it has been a good location,” he added.

Sycamore Bank also did a feasibility study in another fast-growing DeSoto County town, Hernando. It hopes to open a branch there in the third quarter of 2007. One of the members of the bank’s board of directors lives and owns a business in Hernando, so Dowdle feels they’re getting inside information on the local business scene.

“That pretty much does it for us for two years out,” he said of future branches. “We’ve looked at Oxford and it’s a nice town, but it doesn’t fit in with the traffic patterns we’re looking for, and we feel there’s enough competition there now.”

M&F Bank of Kosciusko is a community bank that branched out more than 20 years ago. It’s been in the Jackson metro area since 1984, and chief financial officer John Copeland says it was probably the first community bank to have a branch in Madison.

“Madison County was just beginning to grow, and we saw that’s where the growth was,” he said. “M&F Bank had the foresight to branch out into metropolitan areas. We knew we had to get there in areas of growth.”

Established in 1890, the bank now has four locations in DeSoto County. It has also opened facilities outside the state in Birmingham, Ala., and Shelby County, Tenn.

Mike Crandall, M&F’s executive vice president of retail, says all the areas are areas of growth. “That’s what’s driving that expansion. We felt we had the management and systems to handle growth,” he said. “All the facilities are completely integrated. We have around 45 branches now and only three are in Attala County.”

He said the bank is segmented into three broad markets: small — Ackerman, Bruce and Kosciusko; middle — Starkville, Tupelo and Cleveland; and large — Southaven and the Jackson metro area. “We have a pretty big footprint,” he said.

Asked if the move to large markets indicates that other markets are drying up, Copeland said, “I wouldn’t describe our move like that. We’re just following growth. Our small town markets are still thriving and are important to us.”
He added that the competition for deposits and loans among banks is fierce, and that banks will look at rooftops, population, per household income, retail activity and other economic factors. “All banks are seeking growth and will follow that,” he added.

With a branch recently opened in burgeoning D’Iberville just north of Biloxi, Trustmark Bank has entered the Gulf Coast banking community.

“Trustmark has always and continues to enjoy participating in the growth and development of the communities we serve. Our decisions regarding the location of banking offices are much like the ones other businesses face,” said senior vice president, public affairs, Gray Wiggers. “Deciding when and where to locate new facilities is the combined result of many different types of research including projected economic growth, the demand for financial services, customer traffic patterns and, most importantly, input from our local management team.”

Wiggers said Trustmark is committed to meeting the financial needs of each marketplace it serves. It continually evaluates branch and ATM networks.

“Through this effort, we expect to enhance our customers’ experience by providing convenient locations and offering the right mix of products and services to meet our clients’ financial needs,” he said.

Contact MBJ contributing Lynn Lofton at llofton656@aol.com.

About Lynn Lofton

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