Shared Ownership Helps Bank Thrive in a Downturn
Despite 2007 and 2008 being two of the worst years in the history of the banking industry, with many public banks losing 20 to 40 percent of their stock value, the stock value of The Paducah Bank & Trust Company – a 2008 Top Small Workplace – increased in 2007 by 8.2 percent, and earnings climbed a whopping 24 percent in 2008.
Credited with transforming the city of Paducah, KY, through their progressive revitalization program and support for local entrepreneurs with low-interest, minimal down-payment financing, The Paducah Bank produces enviable results from its investment in the future of its associates and community.
Ask the bank's Retail Sales Director, D'Che Harper-Beyer, what makes it so special and she provides a representative answer: "I look forward to coming to work every day and thoroughly enjoy the people I work with."
Paducah is a community player, and the leadership views every one of their employees as partners in improving the business and local economy. Beyond making work a pleasant experience for their staff, the bank goes above and beyond to involve its team in the operations of the business. Harper-Beyer is one of many who participate in the company's ESOP and 401(k) benefit programs, which have seen collective growth of over 900 percent over the last decade.
Forty years after its founding, hard times prompted an option on the bank to sell in the 1980s, but the deal fell through. When the current ownership group took over it insisted on maintaining Paducah as a private bank.
The bank went on to establish an ESOP in 1987, and defined itself as a Subchapter S corporation. With far few stockholders than your average bank, Paducah's ESOP is their single largest stockholder. It operates as a tax-free nonprofit, with money going in and staying tax free until employees withdraw it upon retirement.
"It's a tremendous advantage," argues President Wally Bateman, "and a great benefit to a community bank."
Marketing Director Susan Guess has worked with the bank for 10 years and highlights the option for ownership as fundamental to the organization's nature as one of the country's Top Small Workplaces.
"We all are a part of achieving that success and we all share in the rewards that are associated with making good decisions and providing superior service," she says.
Paducah Bank's President, Wally Bateman, similarly argues that the ownership program serves to reinforce these values of foresight and quality service.
"As an employee sees modest beginnings turn into hundreds of thousands of dollars, it's pretty easy for them to keep their eye on the ball," he says, adding, "Our employees know that it's going to be a long haul. They're not chasing one quarter to the next. If we hold true and steady, in the end the reward for them is going to be tremendous."
In recalling how industry conditions soured nationally, Bateman cites the fundamentals.
"In any industry, I think greed has a lot to do with it," he says. "It's a lack of attention to the risk. People try to grow way too fast, and they're so hung up on the numbers."
Not that Paducah isn't looking at the numbers. A recent in-depth study they commissioned showed the bank had substantially higher positive ratings regionally than any other financial institution tested, with nearly twice the percentage of respondents saying their opinion of Paducah was either "very positive" or "somewhat positive" compared to US Bank.
"Simply put, a checking account is a checking account. A loan's a loan," Bateman says. "What makes the difference is the people. We think if you get a team of great people who work hard, it will bring great rewards to the group. And it brings great people to you. The best of the best really want to come work here."
Beyond excellent service at the teller window, the bank is held in high esteem among community members in terms of its wider involvement, development and donations. Citing one statistic he's particularly proud of, Bateman explains that for 15 years running Paducah employees have maintained 100 percent participation in The United Way, making the bank the largest single contributor to their local campaign.
"That's just heartwarming. That comes from them. There's no pressure or requirement from us. It's just something we do here," says Bateman.
On top of all this, locals also reap the benefit of the bank's outreach program known as "WowWagon." Renae Crane, who joined the bank straight out of high school and is now in her 32nd year, has the pleasure of driving this modified ice cream truck around the community, making sure everyone knows just how much the bank appreciates its neighbors. The Vice President and Sales Manager says you can't miss the it, with its signature ""WOW, Paducah Bank" slogan at community activities and field days.
"You can hear people screaming, 'Yay, Paducah Bank Ice Cream,'" says Crane.
After 32 years, she says she has developed an incredibly strong relationship with all her customers.
"They know they can trust me and the company I would work for," she says. "That is the reason Paducah Bank is different from other banks in our community."
Company: The Paducah Bank & Trust Company, Inc.
Web site: www.paducahbank.com
Industry: Financial services
Location: Paducah, KY
Number of Employees: 140
Sales: $26 million
