positivelysuperior.com

December/January 2013

By Judith Liebaert

Bullish on Business

National Bank of Commerce Is Invested in Helping Businesses and Communities Grow – and Believes Superior’s Poised for More Success in the Next Decade

The National Bank of Commerce, headquartered in Superior, has been serving the regional community with a commitment to providing quality service and relevant banking products for its customers for more than 78 years.

Today NBC is the largest locally owned, full-service community bank serving Northwest Wisconsin and Northeastern Minnesota. NBC was originally chartered as the Union Bank of Superior, opening its doors for business on April 16, 1934. Since then there have been acquisitions, a name change and relocation.

Under the umbrella of Natcom Bancshares, Inc., NBC’s bank holding company, which was founded in 1998, NBC provides consumer and commercial banking services from two locations in Superior and additional branches located in Poplar, Solon Springs and across the bridge in East Duluth and Hermantown.

Community Bank President-Wisconsin Bruce Thompson said NBC expanded its focus to serving the needs of commercial customers in the mid-to late ‘70s. “That’s when we entered into asset-based financing, which was fairly nontraditional for community banks at that time,” he said. “I think that was a big game changer for us that separated us from the rest of the market.”

NBC stepped up to help its commercial clients manage cash flow by extending revolving lines of credit. This helped with collection efforts on accounts receivable and enabled businesses to finance and hold inventory. “It certainly took experienced bankers to do that, and it took procedures and controls being put into place to be able to manage it,” Thompson said. “It provided a safe haven to local business, allowing them to work with people they trust and earn some credit on capital assets that they otherwise were struggling to finance.”

“The prevailing heritage of taking pride in your vocation has provided an extremely strong work ethic that helps companies prosper in the very competitive environment we see today.”
– Chief Executive Officer Steve Burgess, National Bank of Commerce

NBC Chief Executive Officer Steve Burgess sees the bank’s work with commercial customers as helping business owners achieve their goals. “We are invested in making individual dreams come true,” Burgess said. But that investment goes beyond the individual into the community at large. “Those dreams have birthed new businesses and the expansion of existing businesses that in turn develop commerce in our area,” he said. “With that comes new jobs, the  purchase of new homes, hiring contractors for new buildings – the list just goes on and on.”

That sentiment is reflected in NBC’s new mission statement: “To exceptionally enrich the community we serve and to be a catalyst to all clients, associates and shareholders to achieve their individual dreams, thereby fulfilling the time-honored role of being a community bank.”

Burgess believes the bank’s stated core values – of respect for others, integrity, teamwork and ultimate accountability to each other and the bank’s customers – support that mission.

Burgess is new to the Twin Ports area, coming to NBC with 30 years of banking experience. Prior to joining NBC, he was president and CEO of State Bank Financial for 11 years in La Crosse. Before that he served as president and CEO of M&I Central Bank and Trust in Marshfield, Wis., for six years and president and CEO of First National Bank of Neillsville, in Neillsville, Wis., for nine years.

“We’ve got some extraordinary momentum going in this community now. I feel like we really have a tailwind for the next 10 years.”
– Community Bank President-Wisconsin Bruce Thompson, National Bank of Commerce

Asked what advantages he sees for businesses to locate in the region, Burgess said Superior and the Twin Ports area offer many advantages such as quality labor, abundant natural resources, transportation and scenic beauty.

“Our residents have proven to be very productive and reliable.  The prevailing heritage of taking pride in your vocation has provided an extremely strong work ethic that helps companies prosper in the very competitive environment we see today,” Burgess said. “The area has great arteries of transportation including first-rate trucking companies, one of the biggest shipping ports, a vibrant railroad industry and an international airport which connects the Twin Ports to the rest of the world in an economical way.”

Burgess believes our quality of life in the Northland is an added incentive for new businesses to locate in the region. “Our natural resources, wildlife, lack of traffic congestion, low cost of living and changing seasons create a very high quality of life,” he said.

Community Bank President–Minnesota Bruce Webb also recently moved to the area from Michigan. He agrees that there is much to offer businesses in the Twin Ports – not the least of which is an existing, thriving business environment including industries such as mining, tourism, transportation, health care, and education. However, he said the biggest asset by far is the people in the area.

“You can have all of that – the industry, the infrastructure and of course the quality of life here,” said Webb. “But it’s really the people in this community and their ability to deliver on promises made. There is a can-do attitude and commitment to getting things done, and getting it done right.”

Both Burgess and Webb credit previous management and staff for NBC’s long history of success in the community, along with giving high praise to current employees for continuing the excellent standard of service to all of NBC’s customers. They firmly believe that setting the bar high enables their bank to be competitive with much larger institutions while providing yet another advantage to customers: that of being locally owned and managed.

Dave Evans, owner of Dave Evans Transports, Inc., said he feels lucky to have a bank like NBC in the community. His experience with NBC has been very positive. “They are easy to work with and a quality bank to deal with,” he said. “Their rates are very competitive. Loan fees and origination fees are on par and the decision making process is fast. There’s really nothing I could ask them to improve on.”

Webb confirmed the timely decision-making process. “Decisions about the business are made right here with the same people you talked to when you called to inquire about a loan,” he said. “We’re able to service customers in a very time efficient way. We also live, work and play in the communities we serve. That gives us the local knowledge and the incentive to be a good partner.”

“We got together to ask what we could do to make an impact. Realizing that a lot of homeowners in the area had repairs to make, we offered a low, 2 percent interest rate on loans.”
– Vice President-Marketing Director Valerie Blanchenay, National Bank of Commerce

Kim and John Anderson, owners of WorldWide Machining & Welding Inc. in Superior, agree.  “They know the community. They are familiar with the business and industry and able to ask key questions that cause me to think strategically and plan for our financial future,” Kim Anderson said.

Anderson believes that as a locally owned bank, NBC is invested in the growth of the business community and in individual businesses’ success. “They work very hard to make it happen. They took a risk on our first major expansion, moving to our current location,” she said. “They played a key role in all three expansions of our business. We wouldn’t be where we are now without their help.”

Webb said it goes back to listening to the customers, more than talking, in order to understand the entire scope of the business – so much so that he describes it as “knowing the DNA” of the businesses they work with.

“We take pride in asking those good questions to gain a deeper understanding of how their entire business works and how the cash flows in and out of the business,” said Webb. “From that information, we are able to make recommendations related to proper loan structure, cash management, e-services, merchant credit card and deposit accounts.”

Thompson agrees. “We like to think of ourselves as a financial partner in their business,” he said. “It requires a healthy dose of respect and a win-win mentality for the customer and the bank.”

Thompson also noted that a large part of the bank’s job is to help customers understand the framework in which their companies need to operate in order for the bank to become involved. Expansions and capital expenditures must be be critically evaluated not only for the benefit they might bring, but for possible downturns as well. “We need to plan for the pitfalls, for the ups and downs. That’s a key factor that experienced bankers can provide local businesses,” he said.

The recession of the past few years has been one of the downs. Burgess believes that’s when a partnership with experienced bankers can really help the customer. “For the most part, we’re able to counsel the customer to develop solutions that are in the best interest of the customer and the bank. We’re able to offer solutions that have minimum impact on the business and employees,” he said. “Sometimes it’s inevitable that the business will have to close or enter different ownership. And while those decisions are always hard ones, it’s best to deal with them proactively rather than reactively, to help the customer have the best outcomes.”

“No two falling economies are exactly alike,” Thompson said. “In any major economic fallout, we have to be able to provide workable solutions to help the small businesses adapt and perform.”

“You can have all of that – the industry, the infrastructure and of course the quality of life here. But it’s really the people in this community and their ability to deliver on promises made.”
– Community Bank President-Minnesota Bruce Webb, National Bank of Commerce

Sometimes that means looking for the opportunities, or silver linings, that are still to be found within the economic decline, such as the increase in residential rentals in the wake of the housing market crash. “We have targeted specific business areas with special promotional financing aligned with the silver linings,” Thompson said. “One is the rental market. There is a strong surge in apartment buildings and rental units; we came out with special financing to support that niche.”

About six months ago, NBC also transitioned into equipment financing to enable local businesses to make needed upgrades to their equipment and technology. “Over the last three years, businesses have not been reinvesting into equipment. That equipment is wearing out,” said Thompson. “Modernization and improvement is crucial if you’re going to stay in the game.”

Thompson said that business loans in today’s environment may require more diligence, more credit worthiness and more fact finding on the part of the borrower. “There is a higher bar of expectation in regard to probability of success,” he explained. “We are being a little more selective – but that also means we are working hard with our borrowers to assist them in positioning themselves for success.”

Anderson confirmed that front-end assistance. “We certainly had to do our homework on our business plans and financials,” she said, adding that NBC’s guidance was very helpful. “They work hard to make it happen and they are very helpful finding resources for gap financing.”

Thompson said that current interest rates are historically low right now. “The higher quality aspect there is to the credit, the better, generally, is the loan rate. We’re in the lowest rate environment we’ve ever seen for both consumer and commercial debt financing,” he said.

That doesn’t mean that higher risk loans are off the table, but they may carry somewhat of a rate premium. “Instead of 4 or 5 percent, maybe it’s 6 or 7 percent,” Thompson said. “In the grand scheme of things, that’s still extremely affordable for most businesses.”

“We’re on track for putting $100 million in new commercial loans into the community,” Burgess said. With a $9 million legal lending limit – the amount a bank can lend any one customer – NBC is large enough to service the vast majority of customers within this region. “Most businesses won’t outgrow us,” he said. “But we are also able to pay particular attention to small businesses that in many cases are the lifeblood of our community.”

All three bankers agree that the economy is seeing a slow but steady improvement with money available for a variety of business loans. And Thompson says he sees a brighter economic future for Superior. A lifelong resident, he said he knows Superior is a great place to live and raise a family – but he’s often felt the region is fighting a bit of a headwind because it’s not perceived as a vibrant business community. He believes that is changing.

“They work very hard to make it happen. They played a key role in all three expansions of our business. We wouldn’t be where we are now without their help.”
– Co-owner Kim Anderson, WorldWide Machining & Welding, Inc.

“We’ve got some extraordinary momentum in this community now. Our infrastructure is improved, our schools are new, our roadways are improved. New, modern manufacturing is providing good jobs in the area, I feel like we really have a tailwind for the next 10 years,” Thompson said. “I think Superior is going to be a place where people want to live and work.”

In addition to providing quality services to customers, NBC takes pride in being a philanthropic partner in the community. “A dynamic part of our marketing is to help the community grow,” Burgess said, noting that employees and board members serve in many community organizations, in addition to the bank making financial donations and sponsoring events and causes.

Vice President-Marketing Director Valerie Blanchenay said NBC receives numerous requests for sponsorship and donations. The bank strives to focus its giving on organizations that serve a wider segment of the community, rather than requests from individuals. “We focus on organizations such as the United Way, Salvation Army, Boys and Girls Club, Humane Society of Douglas County, American Cancer Society, UW-Superior and RSVP Superior/Douglas County, to name a few,” she said. “Thus far we’ve supported over 130 local organizations in 2012.”

“They are easy to work with and a quality bank to deal with. There’s really nothing I could ask them to improve on.”
– Dave Evans, owner of Dave Evans Transports, Inc.

That good will reaches into the community in other ways as well, Blanchenay explained, citing a recent flood relief program after the regional flood of June 20. “We got together to ask what we could do to make an impact. Realizing that a lot of homeowners in the area had repairs to make, we offered a low, 2 percent interest rate on loans,” she said.

Blancheny said the program was a success, even though it wasn’t a moneymaker for the bank. The special rate was offered only to those who suffered property damage as a result of floodwaters, yet a mix of both current and new customers took advantage of the low interest offer to borrow funds needed for repairs. To assist the community further, for each loan it approved, the bank also donated $50 to the American Red Cross-Northland Chapter.

NBC’s giving in the community is a long established tradition. Thompson noted. “When I came to work for this bank in 1983, it was instilled in me that our bank’s success has always been driven because of our great partnership with the community – in the way in which the bank and our employees give back to the community,” he said. “That has always been encouraged by the company. I’ve served on many nonprofit boards and associations and I can say with great confidence that this bank’s contributions back to the community are extraordinary. We are the largest independent, locally owned bank in the region and we behave that way in our benevolence back to the community.”

With a mission that is built on a commitment to enrich the communities it serves, National Bank of Commerce is in position to help support new and existing businesses – and to help build a thriving economic future for Superior and the Twin Ports region.  P.S.

Judith Liebaert is a freelance writer based in Superior.

 

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