The Bottom Line — Banking Locally
Banking Locally
Building better communities: How local banks drive local growth and prosperity
When I think about the importance of banking locally, I think about how the community banking system came to be in our country. In the expansionary times of the US, whether it be moving out West or expanding from urban areas into rural and suburban ones, business owners and entrepreneurs had financial needs.
Some had money they needed to protect. Others simply needed it – to build a home, start a business, or buy equipment.
That was the beauty and simplicity – and driving force of local banks. The money deposited by one member of the community fueled the growth of the area as a whole. As communities grew, so too did the banks within them. The success of the bank was tied directly to the success of the community and its members.
Today, there are national banks that serve the entire country, and they clearly play an important role in our national and international economic ecosystems.
So, why do we need community banks?
Whether through a depository or lending relationship, community banks continue to play a critical role as connector, protector, and investor. They have a deep understanding of the needs of their clients and are committed to supporting their local economies first.
National banks, on the other hand, may have different priorities, as they are often focused on selecting the most lucrative markets around the country to maximize profits for their shareholders. Their business model simply does not afford them the luxury of prioritizing local success first.
No matter the size of individual depositor accounts, community deposits when pooled together are significant sources of capital. These safely stored and accumulated funds allow community banks to invest and lend, to fund and grow, and to build brighter futures right here in our own neighborhoods.
At Country Club Bank, substantially all of the lending we do takes place right here in our metro area. We’re constantly looking for ways to reinvest deposits and capital into growth opportunities that benefit all stakeholders in our community. We’re always putting local success first.
Community banks can make a big difference in our economy. Our clients often get to know and speak directly with local banking decision makers, which allows all parties involved to communicate expectations more efficiently. The bankers you see at your grocery store or restaurant are the same people designing capital solutions for your business or employer. They have a vested interest in the success of our community.
Locally-owned and operated banks fuel and are fueled by locally-owned and operated businesses, households, and philanthropic organizations that give back and serve all of us.
At Country Club Bank, we’re proud to live and work in this community, and to pursue our mission of fueling the economic success and vitality of the individuals, businesses, and communities we serve. If you’ve already joined us on this mission, thank you.
If you’re interested in learning more, let’s talk. We’re right around the corner, we’re easy to find in-person or online, and we’re here to stay.
— Collin Thompson, CPA, Vice President, Corporate Banking, Country Club Bank — Member FDIC
Economic Insights
With progress on inflation control, Fed signals rate pause – for now
Over the last 20 months, the Fed has raised interest rates at the fastest pace in four decades, most recently to a 22-year high of between 5.25% and 5.5%, to combat inflation that soared to 40-year highs.
The good news is it appears to be working, and the Fed held steady on rates for the second straight time in its November meeting.
On the topic of progress, the Labor Department reported earlier this month that its index of overall consumer prices rose a seasonally adjusted 0.4% in September compared to August, which was slightly higher than prevailing estimates (0.3%) leading up to the report.
Overall prices were 3.7% higher than a year earlier. Core inflation, which excludes energy and food to better track inflation’s underlying trend, rose 0.3%, putting it up 4.1% so far this year.
With unemployment holding at 3.8% in September (unchanged from August) and job openings ticking back up to 9.6 million (up from 8.8 million in July), the job market roller coaster continues. But that may be part of the new norm, along with inflation numbers that may be settling permanently around 3%, well below the alarming rates of last year but still above the 2% inflation rate target of the central bank.
Since inflation is essentially driven by too many dollars chasing too few goods and services, it's important to consider other market factors beyond Fed interest rate levels. For example, student loan payments are restarting this month and are likely to absorb some of these extra dollars.
Some economists estimate that the return of student loan payments may suck anywhere from $70 billion to $200 billion from the economy annually, as borrowers must now divert their money from everyday goods, services or other debts back toward student loan payments. Estimates we have seen suggest anywhere from around $300-$400 per month in student loan payments on average.
It is also interesting to note that with student loan payments restarting, we are seeing a record number of subprime borrowers more than 60 days delinquent on their auto loans (now at 6.1%) – the highest on record going back to 1994.
Bottom Line: Healthy economic data won’t allow the Fed to declare an end to rate hikes but a pause this month is expected.
Fed forecasting remains tricky because even though economic activity has defied projections of recession, the data is still mixed. Inflation has declined, supply chains have healed, and the demand for goods, services and workers has eased.
The key concern ahead is whether wage growth and robust consumer spending will persist and possibly hamper efforts to reduce inflation. This situation might necessitate a need for further tightening of monetary policy.
While the Fed can claim progress on inflation, it certainly can’t claim victory yet.
— Marcus Scott, CFA, CFP®, Chief Investment Officer (CIO) for Country Club Trust Company
CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.
Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it authorizes use of by individuals who successfully complete CFP Board's initial and ongoing certification requirements.
The opinions and views expressed herein are those of the author and do not necessarily reflect those of Country Club Trust Company, a division of Country Club Bank, or any affiliate thereof. Information provided is for illustrative and discussion purposes only; should not be considered a recommendation; and is subject to change. Some information provided above may be obtained from outside sources believed to be reliable, but no representation is made as to its accuracy or completeness. Please note that investments involve risk, and that past performance does not guarantee future results.
Client Success
McCray Lumber and Millwork’s local banking reinforces local builders
Most business owners vividly recall when Paycheck Protection Program (PPP) loans were made available during the pandemic. With revenues for most companies shrinking or even disappearing overnight, PPP loans represented the best and most immediate source of working capital to pay employees, pay bills, or simply keep the doors open.
Time was of the essence. And when Brian Hall, CFO at McCray Lumber and Millwork, couldn’t reach his national banking provider to start the PPP loan process, he quickly realized the value of having a local banking partner that knows your name, your business, and your needs.
Country Club Bank was one of the first calls Hall made when he decided to explore a new local banking relationship.
With six locations in the surrounding area, and over 200 employees, McCray Lumber was founded in 1947 and is one of area’s oldest and largest independent lumber and millwork providers. Hall wanted a bank with robust resources, stability, and hometown ownership.
“Country Club Bank was responsive and interested and we knew we’d always have local continuity on our account team," Hall said. "We wouldn’t have to explain our business again to out-of-towners in the event of account team changes.”
Chandler McCray, president and CEO of McCray Lumber agreed with the assessment.
“We’d always known about Country Club Bank, and when they demonstrated their local market knowledge and investment in the community, they became an obvious choice for all our banking,” McCray said.
Banking Local Is Better For Business
McCray said banking locally is not only better for the more responsive service, but also for the larger economic implications of keeping deposits in the community and available for local loans, particularly for those in the building community.
“We like the fact that our deposits at Country Club Bank are helping fund new construction and development throughout the area,” McCray said. “Supporting local builders and construction companies is extremely important and this is another smart way for us to do it.”
McCray Lumber has centralized all operating and depository accounts at Country Club Bank, for all McCray Lumber locations. A sweep account previously held at a large New York-based bank was also moved to Country Club Bank.
Hall said the service, speed, and attentiveness of the Country Club Bank team has made banking a pleasure again, and also brought peace of mind.
“It’s been a wonderful partnership, and we feel much better keeping our funds in the area,” Hall said. “We can meet face-to-face anytime with the team managing our funds, but more importantly, we can see them being used for building loans and projects all over town.”
Chandler McCray said operating philosophy and customer alignment is another advantage of working with Country Club Bank.
“We work with builders and so does Country Club Bank, and we both have similar goals,” McCray said. “We want to take care of our associates, our customers, and our community, and working together makes us both stronger.”
Spotlighting Local Businesses
New Video: 'Live, Breathe, and Bank' TV campaign features local business owners - and bankers
We’ve had the privilege of helping local businesses grow for generations, and we recently had the chance to feature several of them in our latest TV commercial. Check out the local business owners leading the way with new growth and new jobs, and how local banking solutions from Country Club Bank are fueling these initiatives.
Links within this video frame will direct you to a website other than Country Club Bank's.
Visit Country Club Bank to learn more about the advantage of having a local, experienced, and proven partner for your personal or business needs.
Giving Back
Country Club Bank associates make an impact with local fundraising and volunteer initiatives
Charitable giving and volunteering has become a team sport at Country Club Bank.
Made up of Country Club Bank associates from across the organization – Team Impact as it is known internally – leads the charge in coordinating volunteer and fundraising opportunities that support over 100 charities annually in the Kansas City area.
Team Impact stands out from other typical HR-sponsored fundraising and volunteering programs in that associates organize it and lead it. Through a steering committee and regular communications, Team Impact keeps all Country Club Bank associates informed about volunteer opportunities and fundraising drives, in addition to putting the spotlight on local charitable organizations that benefit from the program. Local nonprofit organizations are also invited to make short overview presentations at company-wide Hometown Fridays meetings so all associates can learn about these featured organizations and see where their time and dollars are going.
The program is a mix of paid Volunteer Time Off (VTO) hours – each employee receives eight per year – plus optional payroll deductions that go into a general charitable fund directed by Team Impact.
Since Team Impact was formed in 2020, over 200 associates have elected to make regular donations, resulting in more than $70,000 in total monetary donations over the past three years. Nearly 1,500 hours of VTO have been used over the same period as well.
Team Impact donations and volunteer hours have supported numerous organizations throughout the metro area including Cristo Rey, the Women's Employment Network, Caregivers on the Homefront, Birdsall House, Heroes for Hospice, Big Brothers Big Sisters, the Inclusion Connection, HopeKids Kansas City, and many others.
The philanthropic belief “to whom much is given, much is expected” of the late Byron G. Thompson, former chairman of Country Club Bank, continues to this day thanks to the hard work, generosity, and dedication of all associates, and the guiding efforts of Team Impact.
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