2023 Community Bank Case Study Competition Journal

2023 COMMUNITY BANK CASE STUDY COMPETITION

Conclusion CBTC has seen earnings growth in the last five years despite the pandemic and interest rate hikes. The diverse revenue streams of the bank, natural growth in the bank’s portfolio, and the tax savings of its Sub Chapter S designation allowed for steady growth during the past five years. CBTC issued PPP loans during the pandemic and only 1 (one) out of its 1,504 loans issued is still outstanding. The only year that CBTC had a significant decrease in total assets was 2022. CBTC outperformed its peer group in asset growth for years 2019,2020, and 2021. CBTC also saw Tier 1 Capital growth every year for the past five years, and even though the bank accumulated large, unrealized losses in 2022, CBTC plans to hold all its investments to maturity to avoid realizing these losses. CBTC’s conservative approach keeps the bank relatively liquid with 10.0% of total assets being cash or cash equivalents. While the banking industry has changed throughout recent years, so has CBTC. Recruiting for the bank has changed to online applications and searching for candidates on platforms such as LinkedIn and Indeed.com . CBTC changed the outreach effort locally as well with the creation of a minority banking scholarship for The University of Tennessee at Martin, the first of its kind in the area. The newer and more experienced bankers working together allows CBTC to continue serving a diverse customer base. The executive management team has also seen drastic changes over the last five years. This transition was successful with careful succession planning by

CBTC has seen earnings growth in the last five years despite the pandemic and interest rate hikes.

and retaining clients. Scott Freschi, CITO, refers to new technology that customers like to see as customer-facing changes (Davis & Freschi, personal communication, March 21, 2023). In the last five years, one customer—facing innovation that CBTC expects to attract and retain more clients is the bank’s purchase of the leading Banno, online banking offering, which allows CBTC to compete with larger banks within the market. CBTC also prioritizes the protection of its clients and resources to drive profitability. Additionally, another recent technological advancement at CBTC, which is both customer facing and security-improving , is the creation of a secure chat channel that allows clients to communicate with the bank at any time. Another security protocol followed at CBTC is avoiding early adoption of new technology. By allowing other banks to vet new technology, CBTC can avoid having technological failures that harm the bank’s reputation, and avoiding failures will protect CBTC’s main priority, clients, while also increasing the bank’s profitability (Davis, et al., personal communication, March 29, 2023).

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