It’s a Wonderful Life

It’s a Wonderful Life

Kevin Stoker

“Today the branch he’s managing has assets about equal to or greater than the one that was taken over,” Gunther says.

That’s one of the reasons Gunther and several other Utah-based bankers have happily anticipated the completion of the Wells Fargo–First Security merger. Soon after the Wells Fargo signs are raised over former First Security branches, they (Utah bankers) expect to pick up some good employees as well as a large number of customers who, as Utah County’s Central Bank has advertised, “want to look their banker in the eye.”

“Our whole campaign is that the bigger the other banks get, the less personal service they can give,” says Alvin L. Harward, senior vice president of Central Bank. “A community bank has the advantage of knowing your name.”

Central Bank launched its advertising campaign when First Security first announced plans of a merger with Zions National Bank. It has continued its “When is the last time you looked your banker in the eye?” campaign ever since, raking in substantial increases in new accounts and revenue. Central Bank Executive Vice President Matt Packard refused to reveal specific numbers.

The Bank of American Fork, which has seven branches in Utah County, and Zions Bank have already picked up former First Security customers — they consider these new accounts just the beginning.

“Where the rubber hits the road is when the new system (at First Security) goes into effect,” says Gunther. “I have a lot of respect for Wells Fargo and First Security, particularly First Security. They are very capable and competent, but when you get big you have to rely a lot on systems. People can become secondary to systems.”

George Hofmann, executive vice president of the retail-banking division at Zions Bank, says Zions has also seen an increase in new accounts being opened by former First Security and Wells Fargo customers.

He expects the flow of new accounts to increase even further when the merger is finalized, the signage and products start changing, and branches begin closing. “People don’t bank with a bank; they bank with a banker,” says Hofmann.

First Security declined an interview with Utah Business magazine, but its competitors were eager to talk.

“This bank is not for sale,” says Alvin Harward, Central Bank’s senior vice president.” It’s great to work for an organization that’s not for sale.”

Founded in Springville in 1891, Central Bank never closed its doors during the Great Depression. It’s now headquartered in Provo and has 150 employees, nearly half of whom have worked for the company more than 10 years. Twenty-nine employees have worked for the company for more than 20 years.

“We make employees feel like family,” Harward says.

The bank has about 300 shareholders. Its philosophy has been to quietly go about its business, says Packard. But Central Bank’s advertising campaign has been anything but quiet. It includes television commercials, billboards and posters on the side of UTA buses.

“Last year, we were more progressive than we’ve ever been,” Harward says. “We wanted to let people know we’re here.” Packard won’t say how much the campaign cost, but it served its purpose.

“We just wanted to make sure people could make the distinction between us and someone else at the moment of decision,” Packard says.

Community banks’ emphasis on personal service has resonated with the public, and along with a booming economy, has contributed to the growth of Central Bank and other community banks, including the Bank of American Fork.

Founded in 1913, the Bank of American Fork has increased revenues from just below $100 million in 1990 to about $325 million to date. This year alone, the bank increased its revenues by 8 percent to 10 percent. Gunther credits the bank’s growth to its reputation and history. A good economy also has helped.

The Bank of American Fork was rated the strongest bank in Utah in 2000, according to Weiss Ratings Inc. with a capital-to-assets ratio of 13 percent to 14 percent, nearly twice that of some of the larger banks.

Orville Gunther, the bank’s 88-year-old chairman of the board, says the bank gained its reputation through the accumulation of quality assets and its conservative lending policy.

The roots of this philosophy date back to the 1920s when Orville witnessed the failure of a bank in Lehi. The bank’s depositors, including his father, lost their money. Ten years later, Orville was part of the construction crew converting the old bank building into a hospital.

While installing the air conditioner in the attic, he happened upon an old-fashioned currency-binding device. “I asked the carpenter what it was and he said, “That’s what those crooks used to steal our money from us,'” says Dale Gunther.

As a result of this incident Orville says, “I made a firm resolve to never do anything in my life that would make people say I had stolen from them.” Gunther says he would rather take a loss than be charged with dishonesty.

“This may sound corny but as I talk to bank customers, they don’t say ‘I got a loan from the Bank of American Fork.’ They say, ‘I got a loan from so-and-so (naming a specific person).’ There’s a great deal of trust involved,” says Orville’s son, Dale.

Simply possessing a community bank label seems to engender trust among customers. Zions Bank recently launched an advertising campaign positioning itself as a community bank in hopes of capitalizing on the Wells Fargo merger, and in an attempt to compete with the state’s smaller banks.

“We believe we need to continue to call out the differences between Zions Bank, First Security and Wells Fargo,” Hofmann says.

He believes Zions is an aggregation of community banks. Even recent acquisitions, such as Draper and Spanish Fork banks, have kept their names while becoming a division of Zions Bank.

“If you think about what a community bank has to offer, it’s generally one or two branches and people who know your name,” Hofmann says. “We have that, but we have 145 branches (after the Draper merger) and a full-service array of products and services that a small community bank can’t afford to offer.”

Kevin Stoker is an assistant professor of communications at Brigham Young University.

COPYRIGHT 2001 Olympus Publishing Co.

COPYRIGHT 2008 Gale, Cengage Learning