At first glance, it isn’t really clear what the differences are between a credit union, a locally owned and operated bank, and a local branch of a national or regional bank. All are places where you can open a savings account or get a loan. The differences may be subtle, but not inconsequential to the consumer.
Credit unions are non-profit financial cooperatives owned and governed by members who share a common bond, such as belonging to the same business or organization or living in the same geographical area. Credit unions accept deposits from members and use them to make short-term loans. Deposits are regarded as purchases of ‘shares,’ and all earnings are paid out as dividends to members. For that reason, a credit union can pay higher interest on deposits and charge less on loans.
Banks, on the other hand, are community, regional or national for-profit business corporations, owned by private investors and governed by a board of directors chosen by stockholders. Any profit earned by a bank goes directly to its stockholders.
Some banks try to be all things to all people; others specialize. “Our name says it all,” says Mike Flavin, president of The Business Bank of St. Louis. “We’re not a consumer bank, where anyone can get a car loan or a credit card. We focus on small- to medium-sized businesses and the owners of those businesses.”
Established in 2002, the Business Bank has a single location in Clayton. “Unlike consumer banks that want to be wherever their clients are, we don’t need multiple branches all over St. Louis,” he says. “We deliver our services through technology, including remote-deposit software.”
But there’s nothing remote about their level of service, Flavin says. “The Business Bank is about relationships, not transactions. If you’re a manufacturer and want to own your own building, you need a line of credit, a building loan and deposit services. That’s what we’re here for. We’re dedicated to helping businesses reach their goals by offering products and services that meet their needs, not selling them the product of the month.”
Being relatively small and locally owned has other advantages, he notes. “It allows us to understand the ins and outs of the local business community and the nuances of the marketplace,” Flavin says. “For example, a lot of our clients are commercial contractors. We understand the industry, we know the players, and we have ideas that can help them out.”
Southwest Bank, with 17 branches throughout St. Louis City and County, St. Charles County, Arnold, Mo., and Belleville, Ill., has operated in St. Louis since 1920. It was locally owned and operated until seven years ago, when it became an affiliate of Marshall & Ilsley Corp., a multi-state financial services company based in Milwaukee, Wis. “But we’re still a Missouri state charter bank with local board members, so everything is run from St. Louis,” says Andrew Baur, the bank’s president.
Southwest offers services in four areas: personal banking, small business, commercial and industrial, and wealth management. “People tend to over-generalize about credit unions and small banks versus larger banks…you know, small banks are more personal, big banks have deeper pockets and offer more products,” Baur says. “Our goal at Southwest is to offer the same breadth of products and services that a large, nationally or regionally owned bank enjoys, while also providing the high level of personalized service you get at a community bank. It’s a clear win for the consumer, who gets the best of both. We like our niche, people expect great service from us, and we want to keep it that way as we grow.”
Commerce Bank, a Missouri-based company with headquarters here and in Kansas City, arrived in St. Louis 40 years ago. “Today, we have 58 branches and 100 ATMs in St. Louis, and a total of 360 locations in Missouri, Kansas, Illinois, Oklahoma and Colorado,” says Sue Hutchins, executive vice president and director of retail administration in St. Louis.
Hutchins describes Commerce as a regional bank with a strong local focus. “In fact, we call ourselves a super-community bank, because we offer a sophisticated array of financial services and products for individuals, businesses and investors, just like the nationally owned banks,” she says. One of the major benefits of being a larger bank is having the ability and technology to deliver services that smaller banks can’t. “Our online banking services are among the best, and our ATM network is state of the art,” she notes. “We were one of the first banks in the country to offer image-enabled ATMs, which verify deposits at the time of transaction.”
But those high-tech products are delivered with high-quality personal service, she adds. “All of our branches are locally managed, and Commerce Bancshares CEO David Kemper and his family live right here in St. Louis,” Hutchins says. “He’s the fifth generation of Kempers to manage the business; he understands the market and has a strong presence in the community.”
Local management means hands-on service, she explains. “When you come in to do business with Commerce, all of the decision-makers are right here,” she says. “One thing you’ll never get from us is a ‘we’ll call corporate and get back to you’ attitude.”