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Customers consider loyalty to banks
Nationwide, bank customers are testing their dollars locally.
Bank representatives are acknowledging that a mass exodus of customers from large, national banks are switching to smaller regional banks or credit unions.
In Sequim and across the peninsula, activist groups like MoveOn rallied for a similar change. They recommend local banks because local banks supposedly offer similar services to national banks at lower rates, offer free checking and invest more locally.
Four banks with Sequim branches confirm a growing trend of new accounts.
Michele Sorrentino, Sequim branch manager for Sound Community Bank, said new accounts have gone up compared to past quarterly reports.
At the end of September last quarter, Sound saw 146 checking accounts open compared to a normal count of about 90, she said, and so far this quarter they’ve had 120 open.
“Most (customers) are coming from larger banks,” Sorrentino said. “But most of our customers come from word-of-mouth and friends encouraging them to come to us. Sound Community Bank does a great job of customer service with people liking the small town feel and that everyone knows their name.”
CEO Levon Mathews of First Federal said their seven branches are seeing a migration from major banks.
“Consumers are making a conscious decision to switch,” he said.
Gina Lowman, senior vice president for First Federal, said in the past year consumers have been taking a more proactive role in decisions that impact their banking and asking more questions.
“They are moving their entire relationship into First Federal. They want to have that relationship experience,” Lowman said.
Mathews said something happened in the marketplace suddenly for people to pay attention to how local their bank is in its community.
He said people respect that they employ 150 people, put about $11 million into the economy from Port Townsend to Forks annually and are the only locally owned bank. First Federal also controls the largest market share in Clallam and Jefferson counties.
“It’s not by luck that we’re still alive,” Mathews said.
Lowman said the banks’ decision-makers are customers’ friends and neighbors, too.
“It sounds like a tagline but it’s the truth,” she said.
First Federal and Kitsap Bank are promoting a switch from a national bank through advertising and/or billboards.
Shannon Childs, senior vice president/marketing director for Kitsap Bank, wrote via e-mail that two of their billboard messages at their 21 branches read, “We value relationships over fees!” and “Has your bank gone from Free to Fee?”
Both Lowman and Childs said the push toward local banks has been on for a while.
“Kitsap Bank has actually seen a long-running flight to safety every year since 2007 and as of late an even greater surge as national banks have increased their fees,” Childs wrote.
Some Kitsap Bank customers told staff they changed banks due to concern for safety of deposits and protection of resources.
“For some, it is the fact that their private financial files don’t sit in someone’s inbox in New York or L.A.,” Childs wrote.
“As a community bank, our decisions are made locally. For others, it is the fact that when they have a problem, their banker takes care of it. When they call Kitsap Bank, they get a live person, not an automated response.”
“It is also still very important to some people that we didn’t take TARP (Troubled Asset Relief Program),” Childs said.
She wrote that Kitsap Bank sets itself apart with customer relationships and also participates in charitable events with the bank’s Community Partner Program investing hundreds of thousands into communities they serve each year.
None of the four local banks attributed an increase in new bank accounts to the Occupy movement and activists’ efforts.
Lowman said she’s spoken to officials organizing the local movement who said they were suggesting people bank with First Federal, but that was the extent of conversations.
Childs said the trend toward banking local began long before the Occupy movement.
Tim Collins, branch manager for Columbia Bank in Sequim, said he’s discussed it with a few customers but it wasn’t a topic of the day.
Columbia recently opened a new branch across from its old location in Safeway, but more new accounts were opening before the change in scenery.
“In Safeway, we had a lot of foot traffic and even now we’ve had a lot more legitimate inquiries,” Collins said.
Customers are asking about their fee structure and the bank’s future with its 100-plus branches in Washington and Oregon.
“It helps not having a fee for checking and not having to nickel and dime them especially with the economy being the way it is,” Collins said.
He said people appreciate the human point of a local bank including local decision making.
“I’ve been in banking 11 years and from the retail side to the executives, from the top down the focus on people has been amazing,” Collins said.
All four branches report they intend to maintain to free checking.