Surging population growth brings opportunities for community banks that are positioned to take advantage of it. According to recently released U.S. Census Bureau reports, Georgetown, Texas; Lehi, Utah; Cape Coral, Fla.; and Nampa, Idaho, are four of the cities that have grown significantly in population from July 2021 to July 2022. Eager to grow right alongside their cities, these community banks took a look at their potential new customers and jumped at the chance to serve them.
We spoke to them to learn how they did it.
Tapping into ‘the new Utah’ in Lehi
Competition is baked in the pie for Altabank. Lehi, Utah, home to one of the community bank’s 23 branches, experienced 5.6% population growth in 2022.
“There are 113 banks and credit unions in Utah and a population of 3.5 million people,” says Stan Sorensen, chief marketing officer of the community bank. “That’s a whole lot of competition for not a lot of people.”
Altabank, the largest division of its $28.1 billion-asset holding company, Glacier Bancorp, Inc., has achieved substantial success with small- and medium-sized businesses.
“In this market, there are a lot of small banks that do well with small businesses, but the businesses outgrow them,” Sorensen explains. “The businesses are still too small to get the type of attention they want from regional banks. A business between $4 million and $50 million is the perfect size for us, and we’re the perfect size for them. That’s where a lot of our business growth has come from.”
Altabank positions itself as a premier advisor and supporter of small and medium businesses. According to Sorensen, its customers have said they want more of a business advisor relationship. The community bank is developing case studies, for example, to show prospects that Altabank has experience with a range of business issues.
Altabank has also hired experienced bankers from larger banks who welcome a smaller, less bureaucratic environment. Since being hired, they have amped up Altabank’s business advice capabilities.
“[The new hires] bring the sophistication of attracting and working with businesses,” Sorensen relates. “They bring expertise in long range planning and digging into the details of a business. They’re used to dealing with a lot
of complexity. They do a great job of working with customers.”
Growth through education
Breakfast events with presentations on topics of interest to business professionals are another Altabank initiative. Recently, the community bank brought in the Gardiner Policy Institute from the University of Utah to give a presentation on ‘the New Utah’ that detailed relevant economic and demographic research.
One trend is increased racial/ethnic diversity in the state. Nearly one in four Utahns is now a member of a racial or ethnic minority, compared with about one in 10 in 1990. Hispanic or Latines currently form 15.1% of the population.
In response to the changing demographics, Altabank has started more Spanish-language advertising.
“Paying attention to the demographics is really important, especially in those places where growth is occurring due to different ethnicities,” Sorensen says. “You have to listen to those needs and, where you can, adapt to those needs.
Meet the customer where they are.”
This year, Altabank began working with the Suazo Business Center, a community development financial institution (CDFI) in Salt Lake City and Ogden, Utah, which provides business and entrepreneurial education for Hispanic and underrepresented communities. All of the courses are taught in Spanish and include topics on getting a first business loan, operating versus non-operating accounts and other financial literacy classes. Altabank provides office space and conference rooms in both Pleasant Grove and Logan, Utah.
JR Vera, SVP and northern region manager for Altabank, sits on the Suazo Business Center board. Two commercial loan officers, Abe Reyna and Mark Maxwell, teach courses at the center. “We’re glad to support the Suazo Business Center, as it helps our Latino community have access to great education at a very good price,” Vera says.
Staying competitive in Cape Coral, Fla.
Hurricanes and pandemics haven’t slowed the growth of $850 million-asset Sanibel Captiva Community Bank in Sanibel, Fla. The community bank serves nearby Cape Coral, which grew 6.4% from July 2021 to July 2022.
During the pandemic, Sanibel Captiva Community Bank processed more than 1,100 PPP loans, says John Wright, EVP/CFO/COO. The bank’s stellar performance in getting loans approved in a timely fashion and providing good customer communication won over customers.
“During the first round of PPP loans, the larger institutions were taking weeks and didn’t let customers know where they were in the process. Customers got tired of the way they were treated,” Wright says. “We were taking days, and we’re very communicative with all of our customers.”
He adds that subsequent mergers among the larger banks moved offices and decisions to even larger, out-of-state banks. “Some decisions were being moved out of Lee County up to Ohio or Tennessee,” he says. “A lot of customers realized that it’s time to deal with a community bank. Most of our customers want contact with decision makers.”
Active involvement by Sanibel Captiva Community Bank’s top management also makes an impression on small business customers. “When you have somebody that has a problem with a check, and they can call you up and ask what’s going on, it
just makes such a huge difference,” Wright says.
Cities’ growth at a glance
The U.S. population is churning between regions. Between July 2021 and July 2022, relocating residents brought significant growth to the cities we feature here:
The growth in Lee County, where Cape Coral is located, has included quite a few younger people. While the fabled “snowbirds” or retirees are still prevalent, the county is increasingly attracting year-round residents.
Sanibel Captiva Community Bank has responded to the younger demographic by shifting more dollars to digital advertising and targeted email campaigns. Amy McQuagge, VP, director of marketing, says social media is a critical part of the marketing mix. “We’ve discovered that engaging with our customers and community via social media has strengthened and humanized our brand by highlighting our community work, featuring our people and showcasing our relationships with customers,” she says. “Our followers have increased by over 700% in the past five years.”
McQuagge adds that the community bank uses social media to promote its more than 400 nonprofit partners.
“We will leverage our marketing power to help them promote their organization or cause,” she says. “[Our] followers and fans are different from theirs, so it increases their reach. It’s been an eye-opener in how we can help them.”
Finding home in Georgetown, Texas
Georgetown, Texas, county seat of Williamson County, grew a whopping 14.4% from July 2021 to July 2022, according to the U.S. Census Bureau. This makes it the fastest growing U.S. city among those of at least 50,000 people, for the second year in a row.
The rapid expansion of Georgetown and Williamson County for close to a decade drew $4 billion-asset VeraBank of Henderson, Texas, to the area.
VeraBank had enjoyed steady growth in east Texas, but the community bank’s leaders saw the boom times happening in central Texas. “We determined to go where the growth was,” says Brad Tidwell, president and CEO. So, in 2018, VeraBank bought Union State Bank, which had a branch in Georgetown.
The Georgetown market, with its high rate of home building, proved a good fit for VeraBank. The community bank has about 28% of its loan portfolio in single-family mortgages. Like other markets in the U.S., the housing market in Georgetown has slowed recently, but it’s still quite healthy. “It’s slowed from boom to really good,” Tidwell laughs. “It’s still a good market to be in.”
Georgetown’s population growth has also spawned an increase in retail and commercial development. “Ten years ago, this was primarily more of a consumer and retail market,” Tidwell explains. He adds that both consumers and businesses
are looking for a solid lineup of products and services. “It is really a very solid market.”
Investing for the future
As part of its growth strategy, VeraBank has invested heavily in technology. In early 2022, VeraBank converted to Q2 for all of its online and commercial banking. The bank also converted all its ATMs to interactive teller machines (ITMs) and rebuilt its website from scratch.
“I want our customers to be able to walk in the bank and do anything they want to,” Tidwell says. “I also want them to be able to sit in their pajamas in their recliner and do anything they want. Whatever it is, customers need to be able to do it the way that’s easiest for them. That’s how you compete with the big guys.”
Saying “hello” to Nampa, Idaho
Nampa, Idaho—a suburb of Boise and part of the state’s famed Treasure Valley—experienced 4.2% growth in the span of a year. Canyon County, where Nampa is located, and two nearby counties, Ada and Owyhee, have seen a combined increase of 46,000 in population since 2020.
Jeff Newgard, chairman, president and CEO of Bank of Idaho, says the area’s outdoorsy lifestyle, good business conditions and an open, collaborative business community are a big part of the region’s appeal.
The community bank, headquartered in Idaho Falls, Idaho, in the east of the state, has grown right along with its market. It zoomed from $265 million in 2015 to just over $1 billion in 2023.
Bank of Idaho entered the Treasure Valley area in 2019, starting the downtown Boise branch with a simple but unconventional strategy: Hire people and open a branch around them, rather than open a branch and find people.
“We make sure we have people who have relationships in the community,” Newgard says. “They attract their friends and their own team. We empower that.”
Newgard jokingly refers to this as the “five-gallon bucket card table” approach. At the Nampa branch, the bank put a team in the conference room of the Chamber of Commerce building for a year while negotiating a lease for another space. The branch’s business took off in its decidedly temporary surroundings.
Newgard has found that this unusual approach consistently works for the bank. “We’ll be painting and doing construction around the team as they’re bringing in customers. It’s efficient,” he says. “We’re
not spending a lot of money to build something that isn’t in operation yet. We get up and running first and grow the facilities around that. It doesn’t matter if your branch has a five-gallon card table. Customers work with them
and trust them. They don’t care if the wood’s fancy or not.”
In 2022, Bank of Idaho was ranked as the #1 Small Business Administration (SBA) lender in Idaho—a stunning achievement given that the community bank had just entered that market two years earlier. The PPP was the catalyst, as the bank found the program to be a great fit. Subsequently, Bank of Idaho created an SBA department and brought on experienced staff.
“We’ve grown that program exponentially,” Newgard reports. “It’s been a popular product. Even with interest rates high, there’s still some demand.”
Recognizing the risks of rocket-like growth, Bank of Idaho has created an enterprise risk‑management program and hired a chief risk officer. “We make sure we get good outside audits,” Newgard says. “We’re self-policing to stay out of the penalty box with the regulators.”
The community bank has also invested in a strong back office, particularly in strong credit analysts and credit documentation professionals. According to Newgard, Bank of Idaho is very fast to market, which is key to its success.
In the future, Bank of Idaho will continue with the traditional community bank model of relationships first that has served it well so far.
And just like any community banker knows, a bank’s impact starts with those who desire to serve people and make a connection.
“People bank with a person they know, like and trust,” Newgard says. “They bank with people—not a sign, not a logo, not the brand.”
Using data science to target growth
When VeraBank in Henderson, Texas, expanded its market to Georgetown, Texas, the community bank’s management team needed an in-depth understanding of the market to succeed in the new area.
“The more you know and understand what really drives the market, the better you can deliver products and services,” says Brad Tidwell, president and CEO. In July 2023, the bank hired Tricia Ciliberto, SVP, as a data analytics manager to “slice and dice” the preferences of Williamson County consumers.
Her analysis found that VeraBank’s residential mortgage customers were very happy with the community bank, but it wasn’t leveraging these relationships as well as it could to create full-service bank customers. Using this information, VeraBank implemented strategies to convert more customers to additional products and services.
VeraBank also mined data to refine its marketing messages and its delivery channels.
“We’re using data analysis to build out marketing plans in larger, metropolitan areas with a younger demographic,” explains Jennifer Ware, SVP, marketing. “It’s not a dramatic shift but more a refinement at the edges. It can be as simple as choosing images for a campaign that reflect the population research. You want to make sure the channel you’re using resonates with that market.”