First Citizen Bank’s downtown branch and executive office is flanked by some fierce industry competitors, but that isn’t bothering William Braddy and Allen Woodward today. Rather than worry about what the guys down the street are doing, they are much more concerned with what they are doing to show you that First Citizens is the best choice for your banking needs.
While First Citizens is a bit smaller than some of Charlotte’s banking scions (60th in the nation), it is definitely moving up the ranks, and these gentlemen say they are doing it one customer at a time. Allen Woodward, executive vice president of the Metro Region, explains, “One of the most significant differences I saw when I joined First Citizens was the incredible loyalty of our clients. Once a client is with First Citizens, it’s a rarity that we lose them.” By seeking and creating client relationships carefully, he adds, “First Citizens works to keep that client for life.”
Woodward attributes First Citizens’ enviable lack of client attrition to several qualities integral to its character. One of these is a “Customers First” policy that is more than just a slogan – it’s more like a mantra. The bank is constantly making internal and external critical examinations of the client experience. Their goal is to eliminate all barriers that could make banking difficult for the client.
An example of this is the opening of their new SouthPark office on Morrison Blvd. “The branch that this one is replacing wasn’t as convenient for people as it should have been. The new SouthPark location has increased privacy and comfort, better vehicular access and more convenient drive-through lanes and ATMs.” Adds Braddy, the Mecklenburg Area executive, “These little things mean a lot.”
Making Your Business Their Business
First Citizens has also made some changes to their banking services. For example, Woodward says that one of the primary goals was to develop a specialty for serving small businesses. “In the past, small businesses weren’t able to get access to the kind of services they needed, due to prohibitive fees and account limits. We have created packages that help small businesses grow rather than put constraints on them and have achieved great penetration with small business banking services.”
Another vital step in First Citizens’ growth is the evolving advisory role of the banker, which Braddy and Woodward envision becoming more and more important. “As the walls continue to be broken down between banking and other services like investments and estate planning, there is a lot more to know.”
Braddy says that a fundamental banking role to address business clients’ needs is “relationship banking.” A bridge between the teller window and the street, the relationship banker is responsible for being an advocate, assessing clients’ overall financial pictures and needs, and directing them to the right options. It creates an umbrella under which everything from business and personal accounts to estate planning and insurance needs can be managed in combination. Braddy explains, “Relationship banking is built on the personal relationship with the client – on familiarity with the client’s financial history and future plans. It is a partnership created to get the big picture, not just address an immediate need.”
While focusing on fostering a strong client-banker relationship, First Citizens has also given attention to the burgeoning field of online banking services. Business Online Banking, or BOB, offers account management features created to free up time for owners to concentrate on building their businesses. BOB also provides check-image viewing online.
First Citizens has found the online development services to be complimentary to the relationship banking and vice versa. Woodward explains, “Branch banking and online banking work together. Many banks invested heavily in expensive online technology are finding that people aren’t as quick to do all their banking online. They are paying for it now. It is critical to find the right integration between the two.
“At the same time, the advent of online banking has made people realize the need for financial counseling. Many loans and mortgages offered online are little more than a commodity, and that is fine for some people. However the right advice and a view of the bigger picture can provide a better structured loan more closely aligned with a client’s financial goals. That kind of personal service we can provide through relationship banking is irreplaceable.”
All in the Family
At first glance, the position of a bank like First Citizens appears akin to being stuck between a rock and a hard place. On one hand, online banking services like E-lending and Lending Tree are invading loan and mortgage territory. On the other hand, “super size” banks formed via recent mergers and acquisitions have capital resources beyond First Citizens to spend on things like technology and personnel.
Still, say the company executives, this is their niche, their comfort zone. As a family-controlled bank, First Citizens has operated 104 years offering a sense of security, family, and a mutual respect with its clients across the table. Woodward says, “Small business owners get the sense that as an organization, we have been in their shoes. This opens the door for a lot of dialogue and subsequently, understanding.”
There are also other benefits that First Citizens can claim as a family-controlled entity. Woodward explains, “Because of our continuity of ownership, we can work toward stable, long-term goals and our clients can have the utmost confidence that we are going to be around for a long time.”
This history explains why the bank is also sheltered from recent fears regarding accountability and the scandals like Enron and Tyco. “The owners of our company are also its top management, so it is not in their best interest to make short-term decisions that are going to have a negative impact over time.”
Counting on Growth
First Citizens Annual Report cited modest growth in 2001. The report explains that its core net income rose .6 percent and that, despite pressure from interest rate cuts and higher charge offs, major industry mergers and acquisitions, the 9/11 tragedy and the economic downturn, “core earnings remained stable in 2001 compared with the previous year.”
Woodward says this accomplishment can be credited to the conservative nature of First Citizens Bank. “Because of our focus on smaller businesses, we have a lot more diversity in our credit portfolios. So, if one company or industry does get in trouble, we can still continue spreading our business and support those companies who are having modest success.”
Braddy adds, “We also deliberately work on cultivating a diverse mix of clients, and there are some fields that are more stable than others, like law practices and physician practices. By making sure that we maintain and develop this mix, we can also provide a more stable environment for our clients.”
When asked about the current economic environment, Woodward admits, “Things are still pretty soft. A lot of our clients in manufacturing and warehousing have been dramatically affected by the downturn and are definitely holding on to a wait-and-see mentality. So they aren’t currently reinvesting in their companies, adding new people or locations.”
“Perhaps,” he continues, “when things slow down in terms of layoffs, we will start to see a change. Last quarter had an avalanche of layoffs. Also, stabilization will be quiet since more companies announce layoffs than they do new or re-hires.”
Braddy adds that, “Everyone is trying to gauge the economy, consumers and next year’s budget. It is just going to take some time.”
With 5,000-plus employees and $11.86 billion in assets, First Citizens is committed to fueling its own staying power. In mid-September of this year, it announced a strategic realignment designed around major markets where they want to focus more energy. By splitting North Carolina’s former three regions into six, the bank will be able to better respond to and meet the needs of its markets, clients and associates. Charlotte Metro is one of the bank’s new regions and is expected to see more growth under the new organization. Woodward says, “To be successful in North Carolina, you’ve got to do well in Charlotte.”
Components of that success are multifold. For one, First Citizens reports an aggressive new external branding campaign titled, “Do Something Amazing.” Corporate communications say that the message “is intended to highlight how a banking relationship with First Citizens can help people transform their goals into amazing achievements.”
The office also reports that in addition to the ad campaign, First Citizens is expanding their reach into fast growing regions of the southeast, introducing new products (such as their no–cost checking account in June 2002), and enhancing their delivery channels.
Expanding on the message that they are “here to stay,” First Citizens has opened a distinctive 24,000-square-foot facility in their headquarters market in Raleigh, expanded the reach of sister company, Atlantic States Bank, with a new division called IronStone Bank in Texas, Arizona and California, and continues its quest for increased efficiency in all delivery channels.
It is notable that First Citizens has been called a “fortress” by industry analysts. This “fortress” works hard to protect their clients’ money. By making your money work hard for you, First Citizens plans to acquire and keep your business.