My Definition of Community Banking

March 1, 2013 - Mark Ellingson

What does “Community Banking” really mean? Although you may not find a clear definition in Webster’s Dictionary, many Americans are beginning to understand the power and significance of the term. I would like to share what it means to me.

In January 2013, Lewis & Clark Bank was awarded the Oregon City Chamber’s Large Business of the Year Award for 2012. We are truly honored to have received this recognition, especially in light of the other strong community member businesses that were nominated alongside us. This recognition caused me think about which of the bank’s special qualities merited the honor, and I’ve arrived at a conclusion about our roles as bankers and the principles we believe a community bank should embody.

Here are seven principles that, for me, outline a community bank’s responsibility to its clients and community: 

1.     The bank should know its clients, and the community should know the bank. Community banks ought to pride themselves on knowing clients’ names and important details of their businesses. 

2.     The reputation of the bank should rely on its community profile. A worthwhile community bank is measured by high regard among its clients as well as its renown within its business community. 

3.     The bank’s loan decisions should be community-minded. The decisions should be fair, honest, consistent, and trustworthy to all concerned. Though community banks cannot always say “yes” to every loan request, bankers should stand by their answer, even if that answer is “no”. Ownership of the loan decision lands squarely on the shoulders of the loan officer; no one else is there to blame or hide behind. 

4.     Community banks do not, and should not, have marketing budgets equivalent to much larger institutions. The strength of our employees, not our marketing campaigns, needs to be the primary reason a client decides to do business with us. Once a client gets to know a community bank, he or she will likely not decide to bank anywhere else. 

5.     Community banks should put client relationships first. Many financial institutions like to talk about “relationships” until a client needs something the bank doesn’t want to provide. In the more than twenty years I’d spent working for a national bank, I often heard clients voice complaints like, “I’ve had a relationship with this bank for more than 25 years, and you can’t or won’t help me with this?” 

During the nearly six years I’ve worked at Lewis & Clark Bank, I have spoken with a number of clients that have, in troubled times, depended on their relationship with the bank to sustain themselves. It’s not always a fun process for the client or the bank, but it can be gratifying and productive when we work through the difficulties together.

6.     Community bankers should be involved in their community. Although we can’t directly spend large sums of money supporting the many worthy causes in the community, our employees most often work alongside other businesses and local governments to make our community a better place to live and work.

7.     Community banks understand their positions and their roles. I am often asked how our independent bank competes with the larger national banks. My response is this: We know who we are, and although our niche is smaller than the big guys, we fulfill an important role that only a community-minded institution can. Just ask our clients.
Reflecting on our recent award, I’m proud to work for a community bank. The work is not always easy—but then, if it were, everyone could do it.

Mr. Ellingson has 27 years of banking experience; more than 25 of those years were spent at a super-regional bank. Most of Mark's career has been in retail branch management. He has served in a variety of District Management positions including commercial lending, branch management and operations. His most recent position was in small business lending. Mark has served on a variety of different non-profit boards over the years and is currently serving on the Board of Northwest Family Services, the Board of the Oregon City Chamber of Commerce  and the Oregon City Rotary Board. NMLS #235190 

Tags: community, community banking, leadership, relationships