Spotlight On: Jeff Sinnott & Paul Thornton of Vantage Bank
What does the banking segment’s performance tell you about how the San Antonio region is doing?
Paul Thornton: Banks are always going to be a reflection of the economy. There’s construction in all sectors in San Antonio. It used to be just certain segments experiencing growth but right now the east side is starting to pick up. We are seeing substantial development in that direction. South side is also picking up, which has typically been kind of a slower moving area. We have a lot of people moving to the area, specifically from California, New York or even Oklahoma. We’ve had a lot of newcomers to our market, so I think that actually drives banking and drives the financial sector here in San Antonio.
Jeff Sinnott: San Antonio has experienced tremendous growth, and we’ve had significant growth throughout the bank. Our strategy is what we call a “people-first, market-growth-oriented” strategy. In 2021, we wanted to make sure we took good care of our customers and the community. Credit quality was obviously an important piece of that and San Antonio’s credit quality has been tremendous, which has a lot to do with having great customers. It also has to do with having relationship managers who work very closely with those customers. We also expanded our international banking because other banks were pulling away from that segment of the business. They’re doing so because there’s so much liquidity in the market. For us, international banking is part of our identity. We took it as an opportunity to expand that line of business in San Antonio for the first time. We are also looking to expand other offerings. An area we’ll be expanding into in 2022 is life insurance.
We have worked on staying closely connected to the communities, our nonprofits and other stakeholders that impact communities we served throughout the pandemic. Finally, we’ve completely revamped our human capital management system and our HR group. So that was a big achievement for Vantage Bank.
What role does the banking industry play in the recovery of individual families?
Sinnott: Community banks play a vital role in that. And Vantage Bank plays a vital role in that as well. Vantage Bank reached out to every one of our customers and took deep dives within sectors we thought would be most impacted. We modified about a billion dollars in loans to help those customers get through uncertain times. This was before PPP, when we did not know what the government was going to do. The most important thing that a community bank can do is let customers know we’re there with them and we’re going to be patient and flexible throughout. Modifying loans gave many of our customers incredible peace of mind.
What we did turned into a net promoter event for us because our new customers had heard people talking about their experience with us during that time, describing it as tremendous. Our asset growth and our loan growth almost doubled during the pandemic. That wasn’t because of anything we did in terms of having products that are extraordinarily different. It was because of reaching out to those communities. We gave them peace of mind. For many during the pandemic, survival was the definition of financial victory. Community banks play a vital role in having a deep understanding of the challenges their customers and the community are facing and then doing all we can to make sure that they can sustain and scale through that. And that is exactly what we did for families and businesses.
How are fintech models disrupting traditional banking operations?
Sinnott: People appreciate the traditional value model of community banking because you have deeper relationships and understanding of customers’ needs. As people go through life stages or expand their business, there’s a desire for a closer relationship and a natural migration to community banking. However, a challenge to the traditional community bank model is that now an important part of that relationship is digital. Fintechs do a very good job at bringing specific tech solutions but when something doesn’t go right, it’s very difficult to find somebody who’s passionate about helping you resolve that problem.
The new community bank model is weaving these different fintech solutions together under a common experience platform while continuing to serve as the trusted partner our customers deserve. Vantage Bank has been working over the last couple years to build a middleware layer that allows us to quickly connect fintechs together offering a unified experience to our customers. Often fintechs have a hard time going past a certain adoption rate and one of the reasons for that is because they hit an issue of trust and customer support, which the traditional bank offers. If a fintech successfully partners with a bank, it can be a great marriage.
Some fintechs, however, are running outside of the scrutiny of regulators. For us, the challenge is to identify fintechs that appreciate what we do as a bank to be compliant with regulations. One of the biggest challenges we have is finding the right fintech partners who will appreciate and understand our work.
What are the advantages and disadvantages of the trend of consolidation in San Antonio?
Sinnott: Our model is not one of acquisition; we’re looking to grow organically, and we feel like the disruption that’s happening with other acquisitions allows us to do that even more effectively. When we see some disruption in the market, we try to find the talent that fits our culture, bring them in and give them what they need to be successful.
We set out three years ago to develop a desired culture, which is part of how we retain and attract employees. When we say people first, we are talking about our employees as well. We are building a multigenerational bank. We are privately owned and not looking to sell, and we want our employees to be part of that journey and appreciate the franchise that we’re creating. So Vantage bank is 100% family and employee-owned. That’s the way we’re going to keep it and it’s an advantage when we hire these people who are displaced during consolidation.
Thornton: People do want both sides of customer care and technology, and we make the best of it. We have an opportunity on the technology side and on the personal side. We need to continue to build our team with the right kind of teammates who have the same mindset that we have, which is customer-focused. The disruption with other banks will give us the opportunity to be able to effectively sell our products along those lines and pick up those key teammates from the disruption. We have demonstrated this last year that this strategy has helped us with foreign national customers who have unique banking needs.
In San Antonio, the population is trending younger, which is exciting for our community. Historically, we’ve been a retirement community with the presence of military bases. People retire after 20 years and they come back into the workforce. San Antonio is growing its university enrollment. Younger families are moving in and we feel that millennial impact. However, the labor shortage is still a struggle as is the case across the state and the country. Finding new people to come in and to assist with their various businesses is a struggle for many businesses.