2021 CSBS Community Bank Case Study Competition Journal

2021 COMMUNITY BANK CASE STUDY COMPETITION

Table 2. Small Business Loans FYE 2020

community banks have responded to limit the

C&I Loans

SBB

AR Peers

U.S. Peers

damage. With the onset of the pandemic, SBB took immediate actions to protect its employees and customers. The bank’s first response was to close its 46 branch locations. For many banks, this would be a simple process since many people now bank online; however, most of SBB’s customers still use physical locations for their banking needs. Because the client base was accustomed to

Total Number

2,294

1,938

3,783

Share less than $100,000 (%)

81%

79%

68%

Avg Loan Size ($000s)

$56

$58

$85

NFNR Loans

SBB

AR Peers

U.S. Peers

Total Number

808

472

425

Share less than $100,000(%)

43%

32%

16%

Avg Loan Size ($000s)

$155

$185

$279

Source: FFIEC Call Reports Notes: Arkansas peer banks include the six banks with headquarters in Arkansas and assets within $20 million of SBB, and U.S. peer banks include U.S. banks between $1 billion and $10 billion in assets.

Southern Bancorp Bank contributes to mortgage lending in Arkansas and Mississippi. On average, these loans are $64,829 less than the Arkansas and Mississippi average. According to the Home Mortgage Disclosure Act data published by the Consumer Finance Protection Bureau, a total of 234,303 residential mortgage applications were processed during 2019 by all financial institutions. From those applications, 116,114 (49.6%) mortgage loans were originated with an average original loan amount of $160,219. At Southern Bancorp Bank, 517 residential mortgage applications were processed, and 359 (69.4%) loans were originated. The average original loan amount was $95,390. Part II: Serving the Community in a Pandemic SBB’s Response to the Pandemic The COVID-19 pandemic has left a path of destruction within the financial world, but

transacting face-to-face, the bank created online products that resembled personal interactions as much as possible to make the transition easier. In addition, services that normally required a fee for online use such as online banking and remote deposit capture were waived to maintain a relationship with the customers since physical transactions could not take place. Even though the bank’s branches were closed, the drive-thrus remained open, and SBB prepared accordingly for the incoming stimulus package funds. Branches were double cashed and check-cashing fees were waived to accommodate the influx of customers cashing their stimulus checks. The bank further extended its services to the community by reopening closed customer accounts so they could collect their stimulus checks. Two to four days before the stimulus payments arrived at the bank, the government

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