A year ago, when I transitioned from the public sector to banking, I was expecting to have a large learning curve but little did I realize the similarities between a community bank and an economic development corporation (EDC).
As a former EDC professional, my job was to listen to the needs of the community and address them the best way that we could. Whether we were recruiting companies, creating a small business program such as “Ruby Red Ventures,” teaching cyber security or constructing the entrepreneurial eco-system known as the CEED Building, our job was to listen and address the concerns of the community.
Likewise, community banks have always had to provide solutions where others couldn’t; always working and communicating with small business in the community to make sure their operations don’t skip a beat. The more alike these two sectors became, the more I realized, I had never really left the public sector. Yes, I now work for Texas Regional Bank (TRB) and not a city but whether I’m working for an EDC or a bank, the goal is the same…help communities grow. In fact, the clearer this became, the more I began to ponder a question, if community banks are always being put to a test by helping address the needs of the small businesses in the community, where, in return, are the communities in helping them?
In my career, I’ve spent more time asking the bigger banks for grants to support my EDC projects than I did their smaller counterparts and as a result, big banks came to mind when I had banking needs. In fact, as the CEO of Mission EDC, I probably referred more business to the bigger banks than I did smaller banks. Although, I would always pride myself on the amount of effort I placed on supporting local businesses, little did I realize that I was being a hypocrite and forgetting one very important piece of the economic development puzzle…the community banks. Its only taken me 15 years in the public sector to truly appreciate everything community banks do for the communities they serve. Fortunately, my new job at TRB has given me the opportunity to focus on the final piece of the puzzle, to have a new purpose and educate communities about the importance of banking local.
I’ve spent this past year visiting with government entities in the RGV and Hill Country about my unique position as TRB’s Senior Vice-President of Economic Development and Public Finance. My role allows me to essentially be an extension of the community/county/government entity’s economic development and/or government relations team. I’ve had the opportunity to help with the implementation of a TIRZ, conduct several retail studies, help put together economic development strategic plans, setup meetings with state agencies, and work with local state representatives to file banking legislation but most significantly, I’ve spent time talking about the importance of banking local and its impact on economic development.
When a city, county, school district, or other political jurisdiction awards a depository contract, for example, to a local bank, that bank now has more money to reinvest and loan out in the community. On the contrary, when they award the depository contract to the larger, out of state bank, there’s a good chance the money is leaving our region and is invested in outside markets.
Let me explain…let’s assume several local banks respond to a local government bid for their depository contract, a contract that is worth several million dollars in deposits. After reviewing all the responses and taking staff recommendation, the city council/ county commission/ board makes a decision to award the contract to an out-of-state bank. As a result, their money will now leave the region and benefit those businesses and communities that the bank chooses to loan the money in, which are markets primarily outside the RGV. Conversely, should they have decided to award the contract to one of the local banks, the net impact to the entity would have been greater than the interest they earned on their deposits and the fees they saved. If this government (taxing) entity would have awarded the contract to one of the local banks, then the local bank would have loaned out the money to local businesses. Those businesses in return will likely expand their business, hire more staff; thus, generating more long-term revenue (taxes) for the taxing entity.
This past year has been tough on everyone but I’ve learned that community banks are an integral part of our everyday lives (whether we know it or not); they reinvest local dollars back into the community and help create local jobs. Their relationship banking philosophy is ingrained in the way they conduct business, one customer at a time. In the end, I understand that local banks may have some limitations such as lending limits, technology, less locations, etc. but if we want the region to continue to grow, it behooves us to support those that have always been there when we needed help most…community banks.
Editor’s Note: The above guest column was penned by Alex Meade, Senior Vice President for Economic Development & Public Finance at Texas Regional Bank. The column appears in The Rio Grande Guardian with the author’s permission. Alex Meade can be reached via email at: [email protected].
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