Community banks take care of small businesses, individuals

Community banks take care of small businesses, individuals
Second in a series

When the financial impact of the pandemic hit home, small business owners had trouble getting loans from large banks.

“If you look at where their customers are, they weren’t focused on the Tri-Cities and this region,” says Will Barrett, president, and chief executive officer of Kingsport-based Bank of Tennessee, explaining the mindset of big national banks when it came to prioritizing loans.

“They don’t drive by the clothing shop or the restaurant or the service station, but we do, and we saw the effect that it was having on the community.”

It was community banks like Bank of Tennessee that came to the rescue, Barrett says, helping those local businesses get the cash they needed to stay afloat through the time of shutdowns and pervasive fear.

When Congress created a program promising small business loans that would eventually become grants for those who qualified, Bank of Tennessee and its roughly 275 employees jumped into action, he says, many of them working at 2 a.m. and pulling all-nighters to get those loans for small businesses in the Tri-Cities.

“Looking back at what we were able to accomplish and the timeline, it really made us proud to be bankers,” Barrett says.

The challenge with the loan program was that when it started, it required a very manual process, he says. It took time to make the process more automated. Until then, it was just grinding through mountains of paperwork and trying to get loans submitted through a not-always-functional government website, not knowing how fast the money would run out.

The effort paid off, he says, both in terms of the much-needed money and helping people navigate the uncertainties that the situation presented.

“There was a lot of work that happened beyond the money, and that was a lot of consulting, counseling, and giving advice throughout the pandemic,” Barrett says.

“Because we live here and know these businesses, we could help advise them way beyond what the PPP [Paycheck Protection Program] numbers reflect, and that’s hours and hours spent with each business. Overall, through the program, I think we did close to 1,700 loans for $143 million. And if you look at the number of jobs those supported, it was close to 20,000.”

“If you look at the region, that was a big impact just from our services at Bank of Tennessee,” he says, “and I would say that, combined with the other community banks in the region, you’re really making a difference.”

Barrett says this success in helping local Tri-Cities businesses through the pandemic downturn — at a time when many big banks did not prioritize small customers — is an example of the difference between banks that are based in a local community and those that are based elsewhere.

“Small business makes our whole region thrive, and if you look at our employer base, the vast majority are small businesses. I love the large businesses that we have in the region, but the heart and soul of this area are the small businesses,” Barrett says.

“We go to church with the owners, we see them in the grocery store, we grab coffee with them, and that’s something that personally, as a community bank, our success is tied to their success in the region and the communities.”

According to the trade association representing small U.S. community banks, Independent Community Bankers of America, community banks provide roughly 75 percent of all small business loans nationwide.

Even though it’s grown to roughly 275 employees stretched out across Northeast Tennessee, Barrett says he still considers Bank of Tennessee to be a small business; in the decades since its founding, it has grown along with the region.

“We know the trials and tribulations that small businesses go through, so we can appreciate that,” he says, “and as a community bank, we reinvest back in the community.”

Founder William B. Greene Jr. says that although the merger and acquisition trend has been a major influence on the banking landscape nationally — 85 percent of U.S. banking assets are owned by just nine banks, and the nation has a total of just 4,000 banks, down from 17,000 in 1990 — community banks will always be involved in the economy. Why? Because they take care of the little guy.

“We’ve been doing it for [nearly] 50 years, and we’re just getting better at it,” Greene says. “That’s our bread and butter: It’s a small business and the small individual customer that wants personal attention.”

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