Our latest contest struck a nerve. Either the topic, "define a community bank," was one that many people have strong feelings on or, in this era of downsizing, being president for a day of the Schmidlap National Bank was an attractive new challenge. In any event, we received more responses than on any other contest by far.

What of the results?

First, we can summarize that emphasis on community rather than on bank is the key to what most respondents said best describes a community bank. And second, the feeling of empowerment - that each individual can make decisions without going to a superior - is the best feature of these organizations.

Let's be specific.

First, we received some answers telling what a community bank is not.

Stephen G. Gaddis, president of Foresight Financial Group Inc., Freeport, Ill., for example, sent in the following list:

*Personal investments of controlling shareholders or managers who do not responsibly serve all stakeholders.

*Driven by selected shareholder interests, particularly speculative investors hoping for a consolidation gain, or a double dip, or a triple dip.

*Community banks do not treat customers as numbers, "sales targets," or pawns in pursuit of a payoff.

*Community banks do not abandon their locations for opportunities in other markets.

*Community banks do not centralize customer- and market-sensitive decision-making.

And Margaret T. Norton, senior vice president of Roma Federal Savings Bank, Hamilton Center, N.J., concluded her letter with the sentiment:

"I sometimes feel we will awaken one day and find ourselves isolationists in our own hometowns ... working, playing, planning, and functioning daily by machines with little to no interaction with family, neighbors, co-workers, merchants, and bankers."

Other respondents in a more positive vein gave examples of what community banks do that could be called unusual, but still defining.

Kim C. McFall, senior banking specialist at Elliot, Davis & Co., an accounting firm in Greenville, S.C., presented five examples of this:

*Pens are not attached to desktops or counters.

*The president of the bank may take the time to change a light bulb in the lobby.

*I can get a loan even though my financials don't qualify me, because my community bank has the ability to assess my wherewithal and willingness to repay the loan on my character better than a noncommunity bank can.

*When I call to get the bank's president on the telephone, I am going to get the bank's president on the telephone.

Similarly, Robert C. Dabagia, president of First Citizens Bank, Michigan City, Ind., wrote of how one of his loan officers arranged to get an appropriate air conditioner for an elderly lady who had been threatened with eviction from her subsidized housing because the unit she had was unsuitable.

J.L. Austin, chief executive of the Shelby State Bank, Shelby, Mich., had a similar story. A Shelby State teller rototilled the land for the garden of a senior citizen who had remarked on visiting the bank that he was not up to planting a garden this year.

Mr. Austin concluded, "Maybe I can't define a community bank, but I know one when I see one."

This is all great. But we still need to get a winner of our contest - a definition of community bank.

Here are some runner-up entries:

From Sue Ellen Nolan, assistant vice president, Harleysville National Bank and Trust Co., Harleysville, Pa.:

"No matter what your size, it's your mission to keep your image as a respected, independent, community-oriented financial institution. That you provide personal service, the type of product lines your customers need, and that you run friendly, efficient operations that provide not only a fair return to your shareholders, but a rewarding working experience for your employees.

"Never 'no' your customers, always 'know' your customers."

From Vernon W. Hill 2d, chairman and president of Commerce Bank, Cherry Hill, N.J., we received a copy of his bank's principles. One of which was simple:

"Commerce managers have the talent, passion, and authority to do whatever it takes to meet their customers' banking needs."

And George Clelland, director of issues communications at the American Bankers Association, sent in a statement of what a highly satisfied bank customer would say about his bank - the result of recent research by the ABA and Gallup:

"My bank cares about our community, deals with customers fairly, and goes out of its way to meet my personal financial needs."

J. Charles Allen of Elmont, N.Y., formerly with both Chase and European American, presented this definition:

"A community bank is an institution whose mission is to serve the communities within its market with provision of the traditional and nontraditional products and services that are required by those communities; it projects a positive influence on economic development and social stability within these communities. In practical terms a community bank is an active citizen who cares about the welfare and growth of the community and who employs prudent measures to ensure positive direction and results."

Top runner-up was George J. Brehony, assistant vice president of CoreStates Bank, Shillington, Pa., who wrote:

"A community bank is where we try hard to get to know our customers. We try to remember their names if we can and apologize when we forget. We try to anticipate what they need in products and services, and try hard to follow up on problems to make their lives a little easier."

This time, however, there will be co-presidents for a day of Schmidlap National. These two entries went to the heart of the matter.

Judith J. Reinartz, senior vice president of Bank of Santa Clara, Calif., presented the text for a song in the spirit of the refrain about Mother that starts: "M is for the Million Things She Gave Me."

Her winning entry:

Compassion, common sense, confidentiality.

Open to alternatives; offers opportunities.

Money to lend and contribute.

Manpower to volunteer.

Unconstrained by hard-line policies.

Notable for personal service.

Integrity - the watchword.

Trust, truth, and talent.

You and me, not us and them.

Breathes life into its community.

Acknowledges its responsibilities.

Needs its customers.

Knows its community ... "

Our second winner: James A. McComb, senior consultant of Performance Management Resources Ltd., Englewood, Colo.

Here is his winning response:

A community bank exhibits the following traits, consistently:

*Defines a relationship in terms of the people who develop and maintain it - not in terms of how many products the banker is able to sell the customer.

*May be owned by out-of-staters, but makes decisions locally.

*Has its own strategic, business, and marketing plans, and a shared vision developed by the entire local staff.

*Considers profitability important, but considers people more important. Investment in the long-term supersedes short-term slavish devotion to one or two stock analysts who push the bank to drive the next quarter's stock price up, no matter what damage it does to customer service or to the bank's strategic objectives.

*Is involved in their community, doing more than just writing checks and joining organizations.

*Is customer driven, not process driven.

*Has a "value-added culture" instead of a sales culture.

*Consistently provides the profitable products and services that customers need and want. Lines of business such as agricultural credit, mortgages, and dealer relationships are not entered - or dumped - solely because of margin.

*Treats employees as assets rather than liabilities, and recognizes that each person has skills and expertise far beyond that which they use in their day-to-day duties.

*Serves people, not customers. A community bank will always address correspondence "Dear Mary" rather than "Dear Valued Customer."

"In short, community banks are defined in terms of the level of personal service they provide (because all banks could probably argue that they offer personal service), and they are defined in terms of people - not products or processes.

"When can I move into the CEO's office at Schmidlap National Bank?"

Our answer: "Whenever you like."

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