Tag Archives: banking

Insights from Dave

In the past several years we have all experienced the economic consequences of poor banking decisions. We have also experienced its personal tragedies which are the direct results from some very large, complex financial organizations using toxic real estate related products that incented fraud, as well as to over 2.6 million “fake” accounts opened to achieve flawed compensation goals. Should we shoot all the bankers? I’m afraid that those of us whose careers have been in the community banking world would like to make a clear distinction before we take such drastic action.

There is a very real difference in banking institutions. It can be broken down into two business models.  First, is the large, complex banks who view their customers as simply transactions. Everything is based on price and maximizing returns from the bank’s perspective only. They desire a high volume moving through their “distribution network” as quickly and as efficiently as possible. Therefore, they have very little involvement with their customers and provide minimal assistance. Second, is the smaller, community focused banks whose primary objective is to build relationships. Since they reside in the communities they serve, everyone at that bank has a stake in the economic prosperity of the area. They need and want to personalize their financial solutions and thoroughly get to know their customers. The impact of decisions on their neighbors, friends and the local community holds them accountable.

Why is this important? Because community banks that hold to the relationship model do not defraud their customers. In fact, they are the true engines of growth in the United States. In the past year, community banks extended financing to 76% of all of the small business applications made to them while large, transaction based banks fulfilled only 58%. Small businesses drive employment in our country. Community banks which control less than 20% of the banking systems assets, provided more than half of all of the small business loans in this country in 2016, and they did this with 75% of the customers reporting being very satisfied with their overall contact and experience.

Our economy and financial system does not need the concentration of 50% of banking assets and deposits in the hands of just 6 banks who are not committed to any local area or their customers. We need the diversification of 7,000 community banks spread across the country who are relationship based and customer focused.

– Dave Eastburn, Chairman of the Board

 

Banking with Booth

For me, the most rewarding and satisfying part of my job has always been helping people buy that special ride they’ve been looking for, their kids’ first car, or if you’re like me, it’s simply time to upgrade a little. I’ve been doing this for a while now, and I have to tell you, it never gets old.

Many of us can recite every car, truck or motorcycle we ever owned. For most of us, it was a “rite of passage” as a teenager and a measure of pride and success as an adult.

The first car I remember was my Great Aunt Lucille’s red Mercury with push button controls. And like “Dennis the Menace” I so wanted to push those pretty buttons. (I was very, very young 🙂 ).

When Steve and I were married in 1971, he had an Oldsmobile he bought from his grandparents. The day of our wedding, his buddies hooked the horn to the brakes. When we drove away from the church in Richland to head to Cedar Rapids, the horn blared every time Steve stepped on the brakes! Ahhhh, good times.

Our next car was a Chrysler New Yorker Steve bought at an auction. The day after the auction, the previous owner knocked on our door explaining he had left some pictures under the driver’s seat and would we mind if he retrieved them. Of course we didn’t mind, but I have wondered just what (or who) those pictures were of.

We had two Buicks next. When we traded our first one in, the dealer called the next day. We had left two 50 lb. bags of oats and a pair of work boots in the truck. He seemed surprised. Apparently he didn’t deal with a lot of farmers.

In 2002, I bought my very first brand new car. I’m still driving it, but I’m starting to contemplate the possibility of getting something a little newer………………and with a backup camera. That’s a story for another time!

At Iowa State Bank & Trust Co., we have many great loan products and skilled bankers to make the entire process quick and easy. As a locally owned bank, you will always know where to come to, no matter what your financing needs may be. Let’s you and I sit down and see what we can do to put you in a new or used car of your choosing. I’m on the first floor at our 4th and Burlington location.

– Susan Booth, VP Consumer Lending

Konnecting with Karl

I’ve had the pleasure to work with customers at Iowa State Bank now for almost 4 years in my capacity as the commercial lender. However, even many of my friends don’t really know what that means and still ask me what I really do.

Sure, I make loans for business owners and commercial endeavors, but that isn’t what I think is most descriptive of my role. Every industry has its own unique set of challenges and each business its own set of strengths and weaknesses. What I do is help our business customers understand the risks they face and properly manage those risks for the best possible financial outcome for their future.

How I go about this reminded me a little like how my wife, Morae, and I decided upon having children. We sat down and talked out all the risks, pros and cons, and what-ifs we might face. After becoming completely terrified of this prospect, we decided to start our family anyway.

In reality, we felt comfortable with all the risks because we understood how we would deal with them if/when they arise. It is similar when making large decisions in business such as making an investment in technology, inventory, or growing employees. What I enjoy most about my job is sitting down with my customers to discuss the decisions they face to help them better understand the benefits and risks associated with those decisions.

From there, my job is to apply that risk to a competitive financing plan that provides that customer the capital needed to grow their business, and therefore our local economy, one step in a positive direction. Over and over, this model keeps lending decisions local, risks local, and profits local. This is the value of banking with a locally owned bank, we grow together.

Nearly two years ago when Morae and I decided to start our family, we never fully realized how truly amazing it would be to have our son. In fact, often is the case when a developing business excels beyond what was expected. We are so elated that we decided to take the risk that we wish we had done it sooner. That’s why in September, we are expecting the second edition to our family!

I believe building a business is a part of building a community and I’m proud to build my family in the community where I was raised, helping other business owners achieve their success.

– Karl Metcalf, VP Commercial Lending

10 Steps to Opening Your Own Business

New Business

Creating the foundation of your next enterprise can be a challenging process. For everything from ideas to permits, it takes a lot to get a new business up and running. At Iowa State Bank we would like to help you make your dream a reality, and offer these ten steps to opening your avant-garde operation:

  1. Write a business plan. Creating the sound reasoning behind what you want to do and how you want to do it, represents the building blocks to a good business. There are many tutorials to help you develop a plan and to accompany them, we recommend researching information for each section of the document.
  2. Select the best location. Location can make or break a business. In conjunction with your plan’s market research, we suggest scouting out the best potential locations. Adding this element to your proposal can help you create the optimal visualization when describing your concept.
  3. Build a marketing strategy. Great service and great promotion go hand in hand. Unfortunately the old adage, “If you build it they will come,” no longer applies. Now, in order to get clients through the door, you’ll need a structured and continual marketing plan to ensure customers in your area are aware of your business.
  4. Plan your finances. These not only refer to the funds you need to open your business, but also the additional costs to help support the initial years of operation. This extra capital will help ensure your business doesn’t topple while building its ongoing customer base.
  5. Meet with a commercial lender. Once you have the core of your business planned and calculated, it’s time to meet with a small business lender to evaluate your risk. He or she may require a percentage down, or that certain criteria are met before loan signing.
  6. Fulfill any requirements. Whether it’s saving additional funds, offering up collateral, or obtaining designated permits, it is best practice to meet and exceed the requirements that your lender has suggested, in order to maximize your lending potential.
  7. Close on a business loan. After securing the funds for your business, be certain they’re placed within a business account, instead of a personal one. To help ensure your funds are separated, we also recommend creating an LLC for your business prior to opening.
  8. Purchase or lease space. Using the money you’ve budgeted, move forward with purchasing or leasing the space for your new enterprise. After space has been secured you’ll need to acquire equipment and supplies from another portion of your predetermined budget.
  9. Structure and hire your team. Another old saying goes, “If you take care of your employees, they will take care of your customers.” This is a great adage to stick by, as more often than not, people are what makes a business successful. Decide your role within the company, and then craft detailed job descriptions for the rest of your potential employees. Start building your team with the best people for the job, and add further help as needed.
  10. Open and continually promote. The big day has arrived and the doors are officially open. Continue to keep them open through constant and innovative marketing efforts. By pushing your products and services to the public you can ensure that they’re aware of your offerings and consider your business a valued option.

We look forward to meeting with you about your next corporate venture. If you have any questions on how to complete the steps above or have additional inquiries on commercial lending, please don’t hesitate to reach out.