ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Sunday, March 2, 1997 TAG: 9703030003
SECTION: CURRENT PAGE: NRV-18 EDITION: NEW RIVER VALLEY
DATELINE: CHRISTIANSBURG
SOURCE: MARK CLOTHIER STAFF WRITER
Dale Clark unwittingly stars in an ongoing Frank Capra production.
Call it: "It's a Wonderful Bank."
The assessment is more observance of attitude and atmosphere than asset analysis.
The lobby of First National Bank's main Christiansburg office, at the corner of Franklin and Main streets, almost hums with a feel-good, small-town spirit. And branch manager Clark is the one wearing Jimmy Stewart's shoes.
On this particular morning, he's making his way across the lobby. He passes two customers, both of whom he greets by name and with a friendly hand on their shoulder. Then he stops and asks a possible customer, who's sitting on the couch, if he's been helped.
The request is the third in the customer's first three minutes, but none come off as obsequious or contrived. They instead seem genuine, as if the company's customer service pledge on each employee's workstation is a goal rather than a coffee coaster.
It's this atmosphere that the personalities behind First National credit for much of the bank's success.
Assets have grown from $15 million in 1970 to $395 million as of December. It is the 21st-largest bank in Virginia and the state's fourth-largest independent bank. In the valley, competing against regional and other local banks, it has built an impressive 37 percent market share.
Friday marks the ribbon cutting of FNB's Corporate Center, across U.S. 460 from New River Valley Mall.
Smack in the middle of the New River Valley's retail center, the $4.9 million building is a skyscraper, New River Valley-style. It's a four-story brick and mortar monument to a company that - like its new 66,000-square-foot home - dominates the region's banking market.
Hunting customers
Most people familiar with FNB credit President Sam Tollison with much of the bank's success.
When Tollison took over in 1971, FNB was the smallest bank in Montgomery County, with 19 employees and $15.7 million in deposits. Tollison now signs 187 full-time paychecks and presides over deposits of $335 million, the most in the New River Valley. Tollison said the bank, with 37 percent, might have hit the market-share ceiling. Plans call for possible expansion southwest of the New River Valley.
Tollison brought the bank's customer philosophy with him when he took over in 1970.
"But it wasn't so much what we did," Tollison said. "It was what the other banks weren't doing."
What they weren't doing, Tollison said, was hunting customers. Tollison practiced active banking.
FNB Board of Directors member Archie Cromer, along with board President Nelson Ridinger, had noticed Tollison when he was working for the former First Exchange Bank in Blacksburg.
"I think Sam changed the way people bank in this area - going out and greeting the people," Cromer said. "The way banks used to work, they'd sit there and let the customers come to them."
Tollison's banking philosophy is actually a large-market one: he looks at bankers as retailers whose product is deposits.
If deposits are a bank's lifeblood, customer service is its soul.
Ed Dillon keeps tabs on the activity of the financial industry for SNL Securities, a Charlottesville research firm. As he analyzes the success of regional banks, he sees the importance of service to a bank's success
"All banks say it. But not all do it," Dillon said. "The answer lies in their performance and with their customers."
A risk that paid
As for the customer service, it's personified by Danny Hardy. As executive vice president and CEO, Hardy is Tollison's heir-apparent.
"Anyone who knows me will tell you, I'm very aggressive. I'll talk to anybody," he said. "I don't care if you walk in wearing bib overalls with cow dookie on your shoes, or if you're in a three-piece suit.
"If you can't get a loan from us, you typically can't get a loan anywhere. We try to make loans of any size, from $250 to $4 million."
Consider Joe Meredith.
A few years back, he was stuck: The nascent companies at Virginia Tech's Corporate Research Center, which he runs, needed cash.
Meredith sent a letter to 14 institutions asking for creative ways of financing CRC's high-tech start-up businesses. The plan was to let one bank put a branch office in the research park.
The winner: FNB.
Hardy came up with a five-point plan. It included putting an ATM machine and a branch there and developing a preferred customer plan for CRC companies and employees. The bank also agreed to lend $4 million to businesses there - loans, Meredith says, that otherwise might not have been made.
"The CRC is unique," Hardy said. "A lot of banks wouldn't touch them; the companies are so new and conceptual. Banks like to be able to touch collateral, and technology isn't always physical; there's not much to liquidate."
The $4 million FNB committed is substantial; it's the same amount the company earned last year. A typical start-up loan for FNB is in the $25,000 to $50,000 range.
Four years later, CRC has nine buildings and recently started adding two buildings per year.
"At the end of the day, you can have the greatest technology in the world," Meredith said, "but if you don't have the money to buy new equipment, hire new employees and develop projects, it doesn't happen."
The venture has worked well for FNB, as well. Tollison said there have been no problems with any of the CRC business loans. "And that's saying a lot," he said.
In general, one out of two new businesses fails. Businesses in the growing New River Valley fare better, Tollison said.
"Those companies plan well," he said. "They start small and grow slowly, for the most part.''
The toughest period for the local bank was during the late 1980s real estate crunch when half the outstanding loans failed. Even then as some of the area's big developers were having major financial problems, Tollison said, FNB's failure rate was lower than most.
Bank officials say there is no corporate philosophy save this: Everybody has value, so keep them happy and keep them coming back.
"Look at the CRC," Hardy said. "We think that's an exceptionally important economic development hub in the New River Valley."
Knowing the customer
Hico, a Christiansburg specialty construction company, had a similar experience with the bank.
The company started in 1976 with a loan from another, smaller local bank. As the company grew and started working outside the state, it needed the flexibility a larger bank could offer, which led to FNB in 1980.
"The cash demands in my business fluctuate much more than in other businesses," said company President Neil Talbert. "But FNB took the time to learn our business, and they stuck with us. That's why we're still with them."
Talbert said he also prefers banking with local banks.
"They know us. We know them," he said. "Instead of having a vice president in Richmond or Baltimore looking at the bottom line, we'd rather sit there and look them in the eye.
"This business comes down to people, dealing with people, and they're the kind we like to deal with. You won't find a major difference in the products of major banks.''
Hardy agrees. ``When you get down to it, it's customer service. The only thing we sell is money, and mine is the same color as everybody else's.''
First National Bank deposits
(in millions)
1970 $13.5
1975 $24.6
1980 $59.1
1985 $141.3
1990 $246.9
1995 $328.3
LENGTH: Long : 163 lines ILLUSTRATION: PHOTO: Alan Kim. 1. FNB's new Corporate Center dominates theby CNBskyline around Christiansburg's shopping mecca (ran on NRV-1). 2.
FNB's $4.9 million Corporate Center, across U.S. 460 from New River
Valley Mall, dominates the skyline (above). 3. A two-story lobby
with lots of window light greets customers to the new FNB Corporate
Center. 5. When Sam Tollison took over in 1971, FNB was the smallest
bank in Montgomery County, with 19 employees and $15.7 million in
deposits. Tollison now signs 187 full-time paychecks and presides
over deposits of $335 million, the most in the New River Valley.
color. 6. First National Bank's original building (second from left)
on Main Street in Christiansburg as it looks now. (headshots) 7.
First National Bank CEO Danny Hardy (left) and board President
Nelson Ridinger 8. (right) talk of how Sam Tollison's philosophy has
changed the way people bank in the New River Valley.