Business as Unusual: 12 Exclusive Insights from Community Bank Experts

Reading Time: 5 minutes

“Scrambled”
“Unpredictable”
“Unique”
“Hopeful”

These were just a few words our expert panel of community bank thought leaders used to describe the current business environment, which we call “Business As Unusual.”

Since the very beginning, community banks have been on the frontlines of the COVID-19 pandemic. From strategic planning to community engagement, the pandemic has required community bank boards and leaders to throw out the status quo and adapt to ensure their customers can continue to grow and thrive.

Panelists include:

• Paroon Chadha, Co-Founder and CEO, Passageways
• Benjamin Bochnowski, President & CEO, People’s Bank
• Greg Ohlendorf, President & CEO, First Community Bank and Trust
• Steve Williams, President & Partner, Cornerstone Advisors
• Noah Yosif, Assistant Vice President, Economic Policy & Research, ICBA

The panel shared their insights on how board and leaders are navigating this new era, and we’ve shared them below. Key takeaways include:

1. The State of the Economy and Industry: “Now is Calm Before the Storm”
2. Resilience and Recovery Plans: “We had to accelerate our digital transformation.”
3. Board Interaction During the Crisis: Moving Forward with Strategic Planning

The Current Environment in One Word

Each of the panelists was asked to describe how they felt about the current environment in one word. Here’s how they responded:

• “Scrambled” – Paroon Chadha
• “Unpredictable” – Greg Ohlendorf
• “Unique” – Steve Williams
• “Hopeful” – Noah Yosif

 The State of the Economy and Industry: “Now is Calm Before the Storm”

The current environment has been called “the calm before the storm.” Panelists expect the next 12 to 18 months – and even further into the long-term – to be crucial for the economy and the financial services industry.

• “In terms of economic stimulus going forward, I hope in the next phase it really is targeted to folks like in the office space, the hotel and restaurant industries, small retail and the kinds of places that haven’t bounced back. They’re the ones that are really going to have a hard time if this thing is protracted.” –Greg Ohlendorf

• “It’s not ‘We’re all becoming digital banks,’ especially for those with a commercial or wealth management focus. There’s going to be a shift that needs to be managed with numbers and with a focus on competing in a marketplace. – Steve Williams

• “As we’re looking at the next 12 to 18 months, different sectors of the economy are going to be recovering at different paces based on just how much they were impacted by this crisis to begin with. Financial institutions like community banks are really going to need to take stock of which sectors of the economy they’re invested in to help them determine how their exposures are expected to perform in the long-term.” – Noah Yosif

Resilience and Recovery Plans: “We had to accelerate our digital transformation.”

Disaster recovery plans (DRP) and business continuity plans (BCP) have long been in place as a requirement of regulatory compliance. As they activated these plans, many organizations also accelerated their digital transformation plans.

• “We activated our business continuity plan like a lot of companies. We actually had a pandemic section. We would do BCP testing every year and did dry runs with the executive team. But because of what happened, we had to accelerate our digital transformation and our approach to collaboration and sourcing. [For example,] we didn’t have enough laptops on hand, so I called around and was just trying to get them from anywhere. It was a challenge. We realized that was a big miss in the BCP, and consequently have updated it to include some of these things to make sure that we’re even more prepared the next time this comes around.” – Ben Bochnowski

• “I think there’s a catch up going on among the community and midsize organizations in digital marketing, digital origination, and the whole journey. If you look at the seven years between 2012 and 2019, they were very busy producing loans and filling up the balance sheet. That was easy revenue that didn’t have to rely on the retail side or digital or even treasury management. But I’m seeing that change right now and it is very serious. That whole piece is getting more focused now.” – Steve Williams

Board Interaction During the Crisis: Moving Forward with Strategic Planning

As their businesses have evolved, so too have interactions between community bank executives and their boards of directors. This has a direct impact on strategic planning efforts going into 2021.

• “One of the things we really circled in on during our planning meeting when it came to crystal ball thinking was that rates are going to be low for a long time. There’s going to be a priority on figuring out where you can generate operating leverage internally so you can invest in where your customers are going and where you want the bank to go.”
  
  “So we had to figure out the four things [at the meeting] that we’re going to get to work on. We brought a lot of outside guests into the meeting. I think that was a really helpful thing that we were able to do through Zoom. Hearing those perspectives was really useful because there’s so much going on. A lot has to do with efficiency, customer experience, and how you really manage credit in an environment like this.” – Ben Bochnowski

• “We went digital very quickly, but I was concerned. How was a digital board meeting going to work? We’ve obviously done some of that for a long time, but I thought the whole idea of everybody on a Zoom call was really a leap of faith. And then the first one that we did turn out so much better than I could have ever hoped. It was probably one of our most engaging meetings! I think everybody tried really hard to engage because it was different. And so we haven’t thought twice about changing that board practice right now. But it’s worked and we’ve done loan committee meetings that way and other things.”
  
  “But one thing that I woke up to as I was starting to prep for strategic planning, was the length of the meetings. The thought of having a 10- or 12-hour strategic planning meeting online was just way beyond anything that I thought we could effectively handle. So we made the decision to cut it into parts. We’re going to try to do two sessions. I think these are tremendous departures from what we’ve done in the past.” – Greg Ohlendorf

• “The access to expertise is going to be an interesting way to augment what we do in planning. We’re able to now have subject matter experts like our payments specialist or one of our marketing specialists come in. That’s one area where I think Zoom actually helped because we’re able to get five of these subject matter experts in the room. Normally, you can only get one or two based on the scheduling. So we actually are able to get a little more of that education. That was an area where it’s really worked out in our favor.” – Steve Williams

Steve also elaborated further and made an important point on the skillset needs often underrepresented in financial service boards.

• “I think there’s more that type of skill than just, ‘I do audits and tax or I’m an attorney.’ Those are always great, but I think more are looking for that entrepreneurial approach to strategy and execution.
  
  I’ve got a credit union client that’s fairly large, and they actually took three of their board members who are entrepreneurs in the tech businesses and had them in a panel discussion sharing their skillsets. Can you think about entrepreneurial strategic change? Can you break it down? What’s the business model? How’s it changing? Does our addressable market really think that way?”

Watch the Webinar Replay to Learn Even More

There was plenty more to be learned from this rich and thoughtful conversation, so we encourage you to sign up and watch the full webinar replay.

Watch the webinar replay.