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Where I Stand: Relationship banking shines in a recession

By Andy Ryback

Plumas Bank President and CEO

Recessions are the true tests of banking relationships. They are the moments when small businesses need an ally and a true partner more than ever before. They are make-or-break times when a strong relationship with a local bank can make the ultimate difference.

The last recession gave us insight into how different banks supported small businesses during tough times. A U.S. Small Business Administration study dissected how small business lending fared before, during and after the 2008 recession. Community banks led big banks in small business loan growth before the 2008 recession and began lending to small business again more quickly following the economic downturn.

When you consider the baseline for community banks’ business lending — community banks account for 60 percent of all small business loans, according to the Independent Community Bankers of America — you can see that these banks are the backbone of small business success in both good times and challenging times.

This vital support to businesses during difficult economic times is built into the DNA of banks like Plumas Bank, a community bank serving small to mid-sized businesses in Northern Nevada and Northern California. And it shows in the way Plumas Bank is responding to this current economic uncertainty, pulling out all the stops to support entrepreneurs facing unprecedented circumstances.

Community banks across the country are doing all they can to help the small businesses that rely on them. But this is nothing new. Finance experts and economists have long taken notice of this trend.

“Simply put, community-based lenders stick with their borrowers in tough times,” wrote Raphael Bostic, chairman of the Federal Reserve Bank of Atlanta in a column for American Banker.

For small businesses, it is not just access to capital, it’s also the little things that end up making a huge difference as entrepreneurs confront an unpredictable environment and complicated federal relief programs. Like not having to navigate endless phone trees and automated 1-800 numbers when your small business’s future is on the line. Or having confidence that your bank doesn’t have dozens of larger customers prioritized in line ahead of you as you wait to get your critical loan documents filed, federal assistance applications completed, or business questions answered.

Relationship banking means community banks already know your business inside and out, making every step of the banking process more personal, streamlined and effective. It is an incredible asset to a small business in good economic times, and critical lifeline during challenging economic conditions.

During this crisis, Plumas Bank processed more than 1,200 PPP applications totaling close to $120 million. We also deferred payments on over 400 loans totaling more than $100 million to provide our clients payment flexibility while their circumstances rapidly evolved. We fielded thousands of calls from our clients and focused on being open, accessible and responsive to their needs. This is what community banks do during a crisis — we fight for the small businesses that have entrusted us with their financial well-being and their future.

We’ll emerge from this crisis because of the resilience and ingenuity of small business owners. They are the heart and soul of our communities. That’s why we’re proud to be a locally owned and managed community bank standing alongside the small businesses that make up our vibrant communities.

Andrew J. Ryback is director, president and chief executive officer of Plumas Bank and its holding company, Plumas Bancorp. An advocate for small business growth and thriving local economies, Ryback serves national appointments to the Federal Reserve Board’s Community Depository Institutions Advisory Council and the Federal Delegate Board of Independent Community Bankers of America.

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