Businesses have a number of choices when it comes to banking. Sometimes choosing a bank doesn’t center on a menu of products or current loan rates. Businesses may look at relationships between the businesses and the bank and the bank and the community to select the right bank for their companies.
Kurt Kappa, Chief Lending Officer at First Federal Lakewood, says mutual banks can be attractive to businesses because the institutions are owned by depositors instead of shareholders and are committed to helping their communities thrive.
“Depositor-owned means that, instead of just looking at quarter-to-quarter results, we can focus on the strategies and implement plans that reflect our customers’ needs,” Kappa says. “We combine that with our community commitment to help customers through good times and bad.”
Smart Business spoke with Kappa about the benefits of working with a mutual bank for both businesses and the communities in which they operate.
Why would it be in the interest of a business to bank with a mutual bank?
Mutual banks take a long-term approach. They’re looking to build relationships with their customers, understand their unique circumstances and offer solutions that support them. The structure of mutual banks allows deposit dollars to flow back into the community. It also allows personal banking relationships to flourish.
Community investment, personal relationships and local service contribute to the strength of these financial institutions. The more success businesses experience, the greater the positive impact on communities and ultimately, the greater the success for mutual banks.
How is working with a mutual bank different than other banks?
One key differentiator is businesses that work with a mutual bank often get to meet everyone involved — from the branches to the CEO and Chairman. Businesses aren’t just a number. There’s a relationship there and part of the relationship is knowing the decision makers.
In addition to reinvesting money into communities, mutual banks are very active in the communities they serve. They step up when they’re needed, donating money, sponsoring events and donating employee time to perform community service.
How can a business make the most out of its relationship with a mutual bank?
Mutual banks are stewards of their communities. They’re going to partner with businesses’ customers, area nonprofits and local economic development departments. Together, they all work to make their communities better. By working with a mutual bank, businesses are contributing to that cycle of support and improvement.
As more businesses establish relationships with a mutual bank, the bank can lend more to the community — other businesses, a neighbor down the street — and perpetuate the cycle of support. Additionally, mutual banks are always working to promote the community relationships that they’ve established, bring together community stakeholders and highlighting what businesses are doing to make their communities better.
But, what’s often most important for businesses is the banking relationship. And in difficult times, it may make sense for businesses to take a step back and evaluate their current banking relationship. Not all business owners are aware of the differences between banks and how deposit dollars are invested. Now is a good time to learn what local banks are doing to help businesses in their community. For the many businesses that care deeply and contribute significantly to their communities, working with a bank that does the same can be important.
Insights Banking is brought to you by First Federal Lakewood
