The strategic roadmap to the future of community banking

The strategic roadmap to the future of community banking

By Mary Lange

When the TBA Future of Banking Task Force completed its tool kit implementing the Strategic Roadmap for Community Banks in September 2020, the world of banking had already changed dramatically with the galloping pace of technology and the way banks were interacting digitally with customers.  

Banks were six months into a pandemic of epic proportions that upended the global economy and accelerated basic changes to the very core of bank operations. The PPP lending process was under full steam with first and second waves of supporting local small business through the dark days.

The TBA Task Force brought together some of the best leaders and minds in Texas community banking to create a series of questions that if asked, answered and followed would enable community banks to thrive into the middle of the 21st Century and beyond. The Roadmap — Version 1.0 was designed to accelerate thinking and strategic decision making within a community bank and enable it to keep pace in today’s digital world. It was designed to be flexible because every bank’s situation is different.

Everyone knows a roadmap (or navigation apps like Google maps) can sit unused and unreferenced or it can guide travelers to the places where they want to go.  

In 2022, the TBA Taskforce will share the roadmap progress as it is incorporated into various bank’s strategic planning process. This is Roadmap — Version 2.0.

Through member stories, readers will see HOW banks are choosing to focus. Using peer-to-peer examples, Texas banks will demonstrate how they are adapting and employing their own roadmaps to their particular situations — sometimes cruising down the highway, sometimes turning off-road into unfamiliar territory — to achieve sustainable and successful community banking.  

Over the next six issues of Texas Banking magazine, look for explanations in how Texas bankers have put this tool kit to work. Many Texas community banks, like First National Bank of Bastrop, are well down the road in executing their planning processes and budget projections. It is our hope that these stories will inspire other banks to act.

Chapter 1: First National Bank of Bastrop: Preparation is key

The first step on any journey of this magnitude, is creating an inside team that will guide the bank as it undertakes modernization of its systems.

Even before COVID-19 took hold in March 2020, bank management knew that it was time to modernize with significant investments in technology and people.   

“We always feel that we are behind where we should be, even though we probably are not,” said Reid Sharp, president and CEO.

This bank is no stranger to innovation. From the days when Sharp took the reins as president of the $120 million bank at the age of 34 to some 30 years later with assets approaching $1 billion, this country bank grew in tandem with the town of Bastrop. It sits along TX Hwy. 71, a major road that heads East from Austin toward Houston. 

Over these years, the bank has:

  • Cultivated a strong and loyal customer base.
  • Strategically invested in available real estate.
  • Chosen to relocate its headquarters from downtown to the expressway frontage road. 
  • Included a Starbucks to its drive-thru facility to increase traffic and exposure.

Internally, the bank increased its capacity for growth with relevant products and services, along with internal systems and software, some of which worked well and, quite frankly, some that never fired on all cylinders. Sharp is not shy about recounting past experiences where technology solutions might have been overpromised and underdelivered.

Moving on to 2019, in a pre-pandemic mindset. Sharp and his team wanted to prepare for additional growth that would take the bank over the $1 billion asset line. For their next growth phase, he wanted fresh eyes looking at opportunities and challenges ahead.  

The bank took this approach because, as Sharp said, one word, Survival.  

“Our goal has long been to grow as our community grows. Our area has grown but the definition of ‘our community’ has changed over the years. Our community is no longer just Bastrop. To continue to grow with our community we must stay relevant. While the big banks are remaking themselves as technology companies which happen to be in the banking business, we believe there is a future for community banks offering the technology and tools our customers want,” said Sharp. 

“We want to be both high tech and high touch. This means meeting community expectations, such as being able to open an account — either online or in branch — in a matter of minutes. This means, simplifying the home loan process. Customers want to be able to conduct business through apps and they want bankers to be there in person when there’s a problem. 

However, we had some hesitation to go all in with new technology due to prior experiences with previous tech that didn’t pan out as intended. That’s when we decided to bring in personnel with a fresh perspective and an understanding of technology to collaborate with a very capable and tenured management team.”

Based on First National Bank of Bastrop’s journey thus far, Sharp and his innovation team provided Texas Banking three starting recommendations:

Create the role of Innovation Officer and include this role within the organization chart if innovation or innovative technology is part of your mission statement.

Invite a trusted third-party consultant to work with the innovation team to evaluate current processes in high volume practices to find places where automation can really help the most.

Encourage the “old guard” to step back while encouraging mutual respect and patience as the innovation team does its work.

Time will tell if this approach will work but there is a lot of optimism. We look forward to sharing lessons learned and what we also believe will be a roadmap to success for community bankers in a rapidly evolving industry.

In our next issue of Texas Banking magazine, we’ll cover Chapter 2 that highlights NexBank’s experience with their Roadmap.

First National Bank of Bastrop relocated its headquarters from downtown Bastrop to TX Hwy. 71 frontage road.
First National Bank of Bastrop relocated its headquarters from downtown Bastrop to TX Hwy. 71 frontage road.

First National Bank of Bastrop added a Starbucks to its drive-thru facility to increase traffic and exposure.
First National Bank of Bastrop added a Starbucks to its drive-thru facility to increase traffic and exposure.

Reid Sharp, President and CEO
Reid Sharp,
President and CEO

Chase Anderson, Chief Financial Officer
Chase Anderson,
Chief Financial Officer

Michael Hancock, Chief Credit Officer
Michael Hancock,
Chief Credit Officer

Dianna Kana, Chief Operations Officer
Dianna Kana,
Chief Operations Officer

Natalie Hayes, Vice President, Innovation
Natalie Hayes,
Vice President, Innovation

Brandon Daniels, Business Analyst
Brandon Daniels,
Business Analyst

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