Bank of America Builds Comeback with Service

Five mergers from 1982 to 1999, a 47 percent decrease in local market share and a barrage of anti-megabank marketing by competitors can’t knock the smile off Don Gibson and Larry Manry’s faces.

They survived the turmoil, and now life at Bank of America is all about enjoying the stability of a $35 billion public company that’s met its earnings expectations for six straight quarters. Gibson, the Arkansas president for the Charlotte, N.C., banking giant, said the litany of change that grew Bank of America and its predecessors has given way to consistency and an attitude of customer empowerment.

He and Manry, the bank’s Northwest Arkansas president, said that’s helping them rebuild the Bank of America’s local business “one client at a time.”

“It was frustrating at times,” Gibson said. “I really appreciate the customers who went through all that with us, and the ones who are coming back. Whenever you have new names and different operations, everyone feels uncomfortable for a little while.

“But I am charged up about our future because we have the products, people and attitude to bring solutions to our clients.”

Bank of America has 93 employees in Northwest Arkansas, of which 94 percent or 87 associates are originally from the area. Their average term of employment with Bank of America and its predecessors is 20 years. Manry said combine that experience with 140,000 Bank of America employees worldwide — many of whom are experts in specialized fields of banking and finance — and the power of the franchise is staggering.

Manry said local client managers can identify high-end needs such as interest rate derivatives, foreign exchange structures or special treasury services. But Bank of America might then bring in an associate from Chicago or New York to tackle the actual implementation.

“If your internist said, ‘You have this [illness] and we’re going to get the best doctor in this field to come see you,’ you wouldn’t be offended by that,” Manry said. “You wouldn’t say, ‘I don’t want to do business with a non-local specialist.’ You would say, ‘I want the best.'”

James M. Schutz is an analyst and senior vice president in the Chicago office of Little Rock-based securities firm Stephens Inc. He said although the knock on hulking international banks is that they’re too impersonal and bureaucratic to offer personalized service, at some point Bank of America’s diverse cadre of products makes it super competitive.

“The smaller banks in Arkansas are right,” Schutz said. “Bank of America is so large that a lot of its business is centralized. And sometimes being a local institution carries a lot of weight. But Bank of America is very inwardly focused, and its message of service is coming from the top down.

“This isn’t the same Bank of America anymore.”

A Marathon, not a Sprint

The share of deposits in the Fayetteville-Springdale-Rogers metropolitan statistical area held by Bank of America and its predecessors has dropped 47 percent from $446.4 million in 1994 to $235.4 million in 2001.

But Manry said the bank does not keep score that way. It’s more interested in building relationships that will produce a string of transactions over a customer’s lifetime rather than landing one transaction for “today.” And, Gibson said, deposits are only one aspect of the bank’s business. It can employ its $622 billion in assets to help customers in many ways.

A Bank of America associate might also see an opportunity outside the bank’s business and recommend that a client make an investment that appears on someone else’s balance sheet. Five years ago in the banking sector, that would have been heresy.

“That would cause a decline in our deposits, but the total relationship with the client would have grown,” Gibson said.

Schutz agreed that deposit market share doesn’t tell the whole story.

“Deposit share is public so we can get it and look at it, but it doesn’t tell you a whole lot,” Schutz said. “If Bank of America decided to dominate that market, all they would have to do is offer 10 percent on [certificates of deposit]. They’re not doing that because they’d have to keep paying it to keep the business.

“What they are doing though is focusing intensely on customer service.”

Bank of America commercial services such as Image Lock Box and international trade finance have turned a lot of heads locally. Manry said persistence will help the bank make more inroads in local markets like Benton County, which plays to Bank of America’s strong suit because of the high number of retail vendors who move in and out form large cities.

Happy Campers

Jeff Williams is chief financial officer and vice president of operations for Wynco LLC in Lowell, an animal health care distribution company. He said Bank of America’s Fayetteville office took over Wynco’s line of credit in 1999 and that the bank’s competitive rates and sophisticated cash management services have made Wynco money.

“We see those guys at least once every other month,” Williams said. “Whether it’s just for a lunch to visit, or they’ve brought in an expert to explain some new opportunities to us, they understand our business and are continually trying to enhance it.

“They do a good job of being a big bank that functions like a little bank. They make it a point to hustle to come out and see us just like a local small bank would.”

Dave Whitmire, the University of Arkansas’ treasurer and associate vice chancellor for financial affairs, said Bank of America has been great ever since last summer when it beat out 10 other institutions in a bid to underwrite the UA’s debt.

“We were very impressed with the scope of underwriting services that Bank of America provided,” Whitmire said. “We wanted to have an underwriter on board that could do more than strictly bond issues, so that we could use any kind of debt we wanted. Their array of services made them very attractive.”

Phil Whitehead, Bank of America’s commercial manager in Fayetteville, said there are some people who are going to be turned off by a big bank regardless of how successful it is. But he said perceptions in the local commercial lending sector have improved dramatically for Bank of America in the last two years.

“You don’t change from being nice people at a local bank like we started as to being mean people just because the name on the side of the building changes,” Whitehead said. “We’re the same people, and we can go in any office in Northwest Arkansas with our heads up high because we know we’re going to be offering the best technology available. You may pay a little more for it, but it will save you time and manpower, which are money.”

The only perception Manry said he now worries about is that people may think Bank of America’s vast commercial and private banking services make it a “bank for the rich people.” What they don’t realize, Manry said, is that the franchise did 50 percent of the low-to-moderate home financing in Northwest Arkansas last year.

“That’s really who we are,” Manry said. “No matter where you are in life, Bank of America wants to be there with you.”