I recently read an article that talked about the number of banks in the U.S. decreasing from 11,971 to 5,362 since 1995. This article appeared in July 2019, and I have seen a number of announcements (including several in Virginia) since – thus my 5,300 some guesstimate.

I would note that when I started working at the Virginia Bankers Association in 1986 there were over 25,000 banks in the U.S.

As you read this, you may be wondering why so many banks have sold out? A few thoughts – some based in fact and some in my intuition based on my years in the industry:

1. Getting old. I can’t tell you how many banks I have seen sell out due to management, boards, and employees getting older and not bringing good younger folks on board. I think as you look around our organization, you’ll see we are actively addressing that challenge.
2. Wishing for the good ole days. There was a time when everybody brought their payroll check into the bank on Fridays or every other Friday. They used checks or got cash for payments. Since we saw our customers at least once a week, we knew them personally and they knew us. Today it’s different. Rarely do customers bring in payroll checks. In fact, if we see a customer (especially non-business customers) once a month, that’s a lot. We can wish for the good ole days or work to establish relationships with our customers in a technological world of online banking, smartphones, and e-commerce.
3. Staying in the bank. Just like Grandma waiting for family to come visit, I think bankers can fall into the trap of waiting for customers to come to see us. In today’s world, we have to find ways to interact with customers out in the world. Visiting their businesses, doing tailgates or setting up at sporting events, volunteering and being involved in community events… This takes time and time out of the office, but if needed we can always be reached by our cell phones.
4. Thinking about where banking has been versus were it is going. That one is kind of self-explanatory.

Banking (like all business) is competitive and challenging. Hard work and commitment to learning and to customer service will continue to be what determines winners (those that remain independent) versus losers (those that sell out).

Over the past several years we have attempted to put your Bank in the position to win. Bringing folks on board who are committed to customer service. Upgrading our technical capabilities. Growing into markets where our neighbors have gone to find jobs and maybe even moved to.

These steps are good – but without commitment to be the best – the best teller, best CSR, best office manager, loan officer, IT officer, auditor, etc., we will not win.

Winning this game means that we can remain independent and determine our own future – not have someone else determine it for us.

– Leton

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“Letters From Leton” is a blog series comprised of the weekly updates that Leton Harding – President, Chairman, and CEO of Powell Valley National Bank, shares with the Bank’s team members. These newsletters are full of uplifting anecdotes and intriguing insights that are applicable beyond the Bank, so we want to share them with you.