Getting to ‘Yes’
Community bank thrives on service
Macke Mauldin
President
Bank Independent
Although technology has changed many aspects of the banking business, Macke Mauldin, president and vice chair at Bank Independent, says his community bank brings a balanced focus of technology and customer service. The 1982 finance and accounting graduate leads a company with 29 offices and three operation centers across northwest Alabama. Mauldin, who also serves as president, CEO and vice chair of parent company BancIndependent and chair of Interstate Billing Service, spoke with Harbert Magazine about helping navigate the bank through the pandemic and the role of banks such as his in the communities they serve.
Harbert Magazine: You’re the third generation of leadership at Bank Independent. What are some of the biggest changes you’ve witnessed in your banking career and what aspects of the business have stayed the same?
Macke Mauldin: I think it’s easier to identify what has stayed the same. For our organization, it’s our commitment to our team and commitment to our customers. Customer service is A-No. 1, the whole reason that we’re all in
this together.
The things that are different are pretty widespread, but I think the biggest difference is technology. The technology that we have today compared to what we had in the early 1980s is pretty amazing. It allows us to do more things for more people economically. And that also allows our team to have more rewarding careers because they’re able to have more input in what happens every day.
A lot of it is the behind-the-scenes technology. In banking, you have checks. And when I was in college and high school, I approved checks on the proof machine, which was a machine about as big as half of this table. And I had to put in the account number and the amount of the check.
Now all that’s done, as we say, automagically through a system. But the other thing is that we’re able to branch out further because of technology. We have moved into communities that we could not have served 30 years ago because of technology. We have Interstate Billing Service, which would be impossible to operate at our current level without the technology we have today. We can wire and transfer money much easier than we used to be able to, as far as the technology is concerned. We can download and verify everything through technology and not paper through the mail. So I would say the biggest thing is technology.
And I think the second thing is the change in regulations. Some of those regulations are needed and some can be burdensome. But our approach has always been that we’re going to play by the rules, and we’re going to do it right. We’ve always viewed our regulators as our partners. We work very hard to work with the state of Alabama Banking Department and the Federal Reserve Bank of Atlanta to develop a relationship where we know, understand and trust each other, and that there are no surprises to them and no surprises to us. There are some things like the Community Reinvestment Act, where the banks are to reinvest in the communities that they serve. But that’s what we do. That’s who we are. That’s why we were founded. Our core belief is to serve the communities that we’re in.
I think a third component would be that our team has changed a good bit using the technology and education. We’re fortunate that we have a university in our town that we benefit from. We also have lots of Auburn graduates. We have lots of Alabama fans, too, and I call it our Christian outreach. We have technology, the education and the ability to attract and retain young, assertive people — we call them hungry, humble and smart — to help run the bank on a day-to-day basis.
HM: Would you describe the customer experience that you want people to have when they come to your bank and why that’s an effective business model?
MM: It used to be you would come to the branch and you would do your transaction. Today, we have multiple ways of making contact, whether it’s through technology or through personal touch. We call that high-tech or high-touch. We want that interaction to be seamless, whether it’s in person, over the phone or through your digital device. And we want to be able to handle everything our customers want to do with the bank in the manner and method that each customer wants to do it.
Some people really crave the technology. And there are a lot of things that you can do with technology through our app and our online services. But sometimes you just need to be able to meet and talk to somebody about your needs. And we have both of those available. Our customer service center is open from 8-8. Our technology obviously is available 24/7. Some branches are open Monday through Saturday and many of our drive-throughs are open 8-8. So everybody has an opportunity to interact with us as they choose.
HM: Isn’t it a little unusual to have hours that long? It doesn’t seem common.
MM: Not for us. We actually have been doing that since the early ‘70s. The workers at Reynolds and Ford had 12-hour shifts and they needed access to the bank beyond their working hours. It is really a trademark that we have. When we move into other communities, very few people can understand or are really surprised that we offer that service. Those that use it, love it. But it’s more of a philosophy of our culture of customer service, that we’re there when you need us.
HM: There are lots of banks, so what do you think makes your bank stand out?
MM: We provide the same products and services that every other bank provides. But I think what really sets us out is our culture of making a positive difference in someone else’s life every day, whether that’s for our team members or that’s for our customers or that’s for our community. We look for ways to make a positive difference every day. And I truly believe that it’s our “how do we get to yes” culture, both on the deposit side and the loan side. I think our ability to distribute authority throughout the organization and have everyone share the culture of making a positive difference has really made a difference to us. It’s how we operate within the communities that we are going to be in.
I don’t envision us ever being a super-regional or a nationwide bank because we’re growing at a rate where we can maintain our culture and do the right things in the communities that we can serve. We also like to understand our customers and their needs and surroundings. When we make a loan, we like to know what we’re actually lending on and to have seen it. I think that makes a difference, both to our customers and to our team, and has really made a positive difference with the bank over the years.
HM: How did the COVID pandemic affect community banks such as yours, and how do you expect those effects will influence your business in the years ahead?
MM: Before the pandemic reached us last year, I was at a funeral of a friend and the lady standing in front of me was a nurse. She said, “This is going to be bad and you need to go get your N95 mask.” And I was thinking, “Well, that sounds awful.” And then about a month later we shut down.
Later, I was meeting with our CEO/CFO of the bank and we were sitting there saying, “We have just sent 600 people home. What is going to happen to us? Are our loans going to pay?” We were wondering how bad can it get and how much bad can we take.
We determined at one of those sessions that we were just going to roll up our sleeves and do everything we could for our team and everything we could for our customers and our community. And that’s exactly what we did.
We jumped all hands on deck into the Paycheck Protection Program. We went through all of our loans and determined who was going to have trouble in the pandemic and who was going to do OK. We reached out to our customers — all $1.4 billion worth — to see how they were and what they were worried about and how we could help. Our customers, communities and team members came out really well, considering how bad things got.
Our No. 1 concern was our team members and keeping them safe. And I think we did a good job of that. We had some, including me, who got COVID. But, we did our best to protect our team, let as many team members as possible work remotely, and keep the bank running.
I think our marketing team did an outstanding job of communicating, communicating and communicating virtually every day about what we’re doing and why we’re doing it. And our technology team was able to get our technology out to all of our team members. We enhanced our security, too.
We looked for ways to help our customers get through the pandemic. And then the government came out with these programs, which literally saved the country, through the PPP programs and some other things, the distribution of money. It helped a lot of people and our team did a really good job.
What have we learned from the pandemic? I think what we learned is preparation and technology. Being high-tech, we were ready for this. I wish it wasn’t a pandemic that tested us, but we were ready.
The other thing we learned is that we can do some things better. We closed our lobbies for almost a year, and our customers have really transitioned the methods they use to communicate with us.
While we have opened our lobbies back up, the traffic is not what it used to be. The traffic remains high in our drive-through and traffic on our technology platforms is stronger than ever. Our team led an effort to go remote with our electronic signature program, where you can sign electronically for all your loans. We did over 3,000 PPP loans, all through electronic signature. We opened more accounts in a three-month period than we’ve ever done in the history of the bank.
At Interstate Billing Service, we onboarded our largest customer in the history of the organization and we expanded our services into Canada, all remotely.
HM: That subsidiary of your bank, Interstate Billing, offers accounts receivable financing services. How does that work and what type of companies use those services? What led you to get into that business?
MM: We were doing it in a very small way and we had the opportunity to buy Interstate Billing Service from a major regional bank. We went to look at IBS, and we realized that we did not know what we were doing. We realized that either we were going to buy IBS or we were going to get out of what we’re doing. This was in ’08, ’09 and the world was falling apart for a lot of banks. So they made us an offer that was fair and we bought it and we haven’t looked back.
At IBS we do accounts receivable financing for franchise truck dealers, automobile dealerships, oil field services, where they provide services to the major oil fields, whether it’s rigs or pipelines. We do it in the equipment rental business, too. And we do this in 45 states, including Hawaii. We even have several clients in Canada now. We do more than $2.5 billion in AR financing per year. We have about 500 clients and service about 95,000 of their customers. We do 15 to 20,000 invoices a day.
IBS has the technology, the system, the discipline, and the know-how to do it. We took their pattern, added our customer service culture, and tripled the receivables since we bought it.
HM: How does the role in the community of a bank such as yours differ from that of a larger bank that’s part of a big regional or national bank? Are you really competitors, or are you operating in different sectors of the economy?
MM: We operate in a different realm of customers. The larger banks do an outstanding job in the realm that they’re in. What we think we can do for the small to medium and somewhat large customers is really tailor our loan package to fit their needs and meet the credit standards that we have. We have a culture of “How do we get to yes,” when many banks are quick to say no if you don’t fit their box.
We feel responsible to help lead communities and economic development. As banks are merged and their leadership moves farther away from our community, that puts a greater responsibility on us to continue to provide that leadership in the community for economic development. We have several team members dedicated to community outreach and making sure that we have our team members in organizations within the communities that we serve and that we make a positive difference for the community where our officesare located.
HM: Regulatory requirements have changed since you began your career in banking. Have community banks sometimes been unduly burdened with regulations that stem from the questionable actions of big banks? And what banking regulations would you like to see change?
MM: Here are our values: We play by the rules. We respect each other’s differences. We treat each other the way we want to be treated — this is what we communicate to everyone. We act with integrity; we’re open, honest and forthright. We do the right thing for all parties involved, and we honor our commitments. And if every bank did that, we would not need regulation.
However, we understand that not everybody can lead with these principles or act with these principles. So we understand the need for regulation. And many of the regulations are for our benefit, and we benefit from the protection of those regulations. For example, we have FDIC insurance that protects the depositors. However, there are some regulations that sometimes are not applied logically. The Community Reinvestment Act is a really positive regulation, but sometimes some interpretations are not consistent with the theme of that regulation.
We have some rules and regulations on capital and debt that really were put in place because of the sins of the ’08-09 problems. We have a lot of regulatory burden in our mortgage department that was installed because of the rogue operators. We didn’t do anything wrong, but our customers are paying the price.
What we see now is that regulation hasn’t caught up with technology. But we have an outstanding working relationship with our regulators, and we work very hard to maintain that relationship. Before our examinations, we visit with our regulators and review everything that we’ve done and what we’re doing since the last exam. We tell them what we’re worried about, what we’re concerned about in the community, within our loan portfolio. Also, what concerns us with the Fed or the state. We want us to define Bank Independent to the management at the Fed and the state and not be defined to them.
HM: How did your education at Harbert help prepare you to enter the
business world?
MM: I knew I was coming home eventually to Bank Independent while I was in college. My education helped me think better. It taught me how to think, because a lot of the stuff that I learned is now done by a calculator and a computer system. When I was in school, we didn’t have a calculator. In finance, we had the table in the back of the book to figure it out.
I had two professors who are still around — Pat Evans, who was an accounting professor, and John Jahera. Pat taught me that accounting can be both logical and fun, and how to apply the facts. If I didn’t have a basic understanding of a balance sheet and how things go from the income statement into the balance sheet as Pat taught me, I couldn’t do what I’m doing today. John said he didn’t necessarily want you to grow up to be the CFO of Sears and Roebuck or Exxon. He wanted you to learn to think about how you can be the leader of the company you’re working for.
Those two professors brought a real perspective to the knowledge that they were providing, not just facts, but how you can logically think through a problem. To understand how it happens is important in understanding the implications of why it happened.
HM: What would you say was the best advice you got in the early stages of your banking career?
MM: Roll up your sleeves and get to work.
HM: What advice would you offer Harbert students who will soon be entering this increasingly complex business environment?
MM: I think of those relationships that you build in school. You develop those relationships early and you never know how they could benefit you years later. I would encourage people to develop those relationships.
And then, when you get into your job, be hungry, humble and smart. Hungry means you want to know more. You want to understand more, and you’re eager to do more. Humble is not being meek and mild, but understanding your strengths and your weaknesses and what role you play within the organization. And smart is not necessarily an ACT score or all A’s in college, but being smart to understand people and read the room and understand the dynamics of what’s going on in the room. Where you’re not oblivious to signs that nobody’s following you or they want you to be quiet or they want you to talk more.
