Summer Series: Best of Conversations with Banking Leaders, Pt IV

In Part 4 of our special summer series revisiting our discussions with banking leaders, we’re spotlighting more community-first approaches from Jimmy Stead, Chief Consumer Banking Officer at Frost Bank, a super-regional bank based in Texas, and Todd Nagel, President and CEO of IncredibleBank, one of the country’s first national online community banks. These two leaders describe how their culture and core values are ingrained in every aspect of their business and how their commitment to their customers and community is a natural outgrowth of empowering employees to live the brand every day.

Text Transcript

Sean Keathley: Welcome to our Believe in Banking podcast. I am Sean Keathley, president and CEO of Adrenaline. In this special summer episode, we’re going to revisit some of the bits of brilliance from our discussions with different banking leaders. In this week’s special episode, we’re going to look a little more closely at the community first commitment from community financial institutions. We’ll hear from Jimmy Stead, Chief Consumer Banking Officer at Frost Bank, and Todd Nagel, President and CEO of IncredibleBank, who have a lot to say about their love for local, how they’re serving communities and how it provides an opportunity for even more connection and growth. We’re happy to return to these lively and enlightening conversations all about putting the community first in community banking. 

Sean Keathley: As we went through these and we’re getting great feedback and people are tweeting us. One of the big things we kept hearing is let’s hear from some of the people in the trenches in the front lines. And so we’ve had two other banks on, and one of the things we’ll be talking to you about, both of those organizations were more kind of community-sized. And we have a little bit of a different animal here. Frost Bank is a $40 billion bank and growing. And so I think that’s a good kind of setup for you. Let’s almost pretend that, although as Gina points out, this is not realistic that people have not heard of Frost Bank. So let’s just maybe let you give like the minute or so bio we’ll get into your bio in a second, but just introduce the unique story of Frost Bank. It really is a great foundation for the conversation we want to have today.

Jimmy Stead: Yeah. Great. So Frost Bank was founded way back in 1868 in San Antonio, Texas. And I think one of the most interesting things is we’ve survived world wars and depressions and recessions and financial crisis, and now a pandemic. I’m certainly not the historian of Frost, but one of the things I know is that the gift of our history really, in my opinion, is the depth that which our core values are ingrained in every aspect of our business. And those are integrity, caring, and excellence. They just guide everything that we do, how we interact with our customers, how we treat employees, what we do for our shareholders, and for that matter, the communities that we serve. So really at the end of the day, those values have carried us through all of that time. And here we are a bank and all the major markets in Texas.

Gina Bleedorn: Jim, what do each of those mean, do you mind digging into them for a minute? Because they’re a little a-typical, a little unique in those values, integrity, caring, excellence. Do you mind talking a bit about each and what that means to Frost?

Jimmy Stead: Sure. There’s so much depth in really each of those. So I’m going to try to keep it somewhat short, but the integrity piece, this is really about doing the right thing when no one’s looking and building trust with our customers and communities and even other third-party like regulators and it really every aspect of our business it’s how do we do the right thing? And how do we have the courage to do the right thing? Caring is caring about each other, caring about our customers, treating customers with significance and then excellence is we always want to do a great job. We’ve won the JD Power award for customer satisfaction, 11 times in a row. And the report out in that meeting is always my most stressful meeting because Frost bankers just want to be better and better. And so there’s going to be one or two percentage points there that I’m going to lose sleep about. And so that’s really the excellence piece and it takes all three to be a successful Frost banker integrity, caring and excellence.

Sean Keathley: I’m really wanting to talk about this phone tree real quick. I think the strength of what Frost’s has done for the last 150 years that have maybe allowed you to survive all those things you talked about right now with branches largely closed and people doing digital, like think back to like before you even heard of COVID, and why the bank thought about doing that, if you don’t mind?

Jimmy Stead: That decision to not have a phone tree when the customer calls were made years ago before my time. And I’m so thankful, it was, it really just couldn’t be simpler. It’s just coming out of a belief that when a customer calls, they should be able to talk to a real actual person. And it’s just that simple. We answer over 2 million calls a year that way, and we’ve continued to build on it. We’ve implemented 24 seven customer service. So now anytime you call, you can talk to a real actual person. And last month we did something that I’m really excited about.

Jimmy Stead: In our mobile app, we have a feature now that if you call us after you log in, after they authenticate, we’ll pass your information to our call center and they’ll be able to greet you by name and they don’t have to reauthenticate you, they already have the authentication from the mobile app, which I think is just such a great feature. It just continues to build upon that same idea of you should be able to talk to a person without barriers. We shouldn’t get in our customer’s way from interacting with us.

Gina Bleedorn: It’s funny to hear you say that Jimmy and I say funny because it’s such a wonderful and valuable customer seamlessness feature where you’re reducing friction, that very few banks have actually employed, but other industries have started to employ. And once a consumer experiences it in another industry, they start to transfer those expectations to all industries. And it’s wonderful that you are doing it in banking.


Todd Nagel: We really want to focus on giving a better customer experience because people forget what you say, but they always remember how you make them feel. And so we just think we can beat the big banks every day.

Todd Nagel: It’s really hard to talk to anybody if you call a big bank, just pick a big bank and dial their 1-800 number and see how long it takes to talk to them. So we give out cell phones and our call center is supposed to answer within two or three rings, which generally happens unless we’re really, really busy. So again, there’s just, I think right now, depending on what statistic you look at, big banks control 70% of the deposits in the country, and there are less than 5,000 banks. So community banks should be hunting these big banks, it’s easier. Why hunt the neighbor in your town? There just isn’t as much market share.

Sean Keathley: I hope you take this the right way. It feels like there’s been a combination of luck and good. Is that a fair thing to think about? We are a company that creates brands, the Incredible Foundation is amazing how that became your brand, your love for mobile homes. And just, again, I said at the outset, thinking differently, and those things were serendipitous and timing and whatnot, but I think without culture, your leadership and this company-wide focus on what you’re going to go do, you don’t even execute on it. So is that a fair way to think about how you guys have had some of the successes as you continue this journey to be a really unique institution?

Todd Nagel: Yeah, there’s no question. Some of it was very deliberate and some of it was just flat out being at the right place at the right time, there’s no question about that. And you make your luck if you set yourself up to win. And I think that we knew that culture just drives strategy, but it also eats strategy. So we had to get our culture aligned before we… Think about it. We changed from River Valley State Bank to IncredibleBank. We took a 50-year legacy brand and we changed it to IncredibleBank. It was a huge move and it scared us to death. And we really had to get our company ready and our culture ready before we did that. And there were some tough moves there with personnel and other things.

Todd Nagel: But certainly, I think what’s been fun is we take community banking on the road. So just because we’re headquartered here in Wisconsin doesn’t mean that we can’t finance a home in Oklahoma, they use concrete there as well. And those are the kinds of things we kid around, where people be like, “Oh my gosh, how do we do a house in Oklahoma?” And I’m like, “Well, I don’t know, is concrete made different there?” So we just got to have fun and get sarcastic with each other. And then some of the stuff, it just gets catchy. And I think people want to be around where the action is. And so, yeah, we have a little bit of the firetruck syndrome and that people want to know what’s going on over here, but there are a lot of people that can’t work here Sean, we’ve hired some traditional bankers and we scare them to death. They quit really quickly.

Sean Keathley: Right. I think to back up, I often think about the definition of luck as timing and hard work. And then to your point, you guys know who you are and it is an opt-in mentality. And I think the tenure of your team is a testament to the right fit people, really help you deliver. And then just one of the things I saw, and I know, although this national expansion, just thinking about your roots and what the mid… Well, when I think of it in the Midwest, and I don’t know how many banks have a 15-acre farm. And just talk about why you would do that and talk about the IncredibleBank Foundation. I think it just underscores what you’re talking about with the culture you developed at the bank.

Todd Nagel: Yeah. And our founder, Ron Nicklaus, who’s now 85 years old. He was a farmer before he was a banker. He was one of the largest green bean harvesters and planters of green beans across the country. And in the eighties, he bought the bank. So he’s never lost his farming roots. And he started this, what he calls a garden, which I think when you get over 15 acres is no longer a garden, but he wanted to grow vegetables for the employees as a way to give back. And then the farm kept growing and growing and growing and growing. And he grew more vegetables than 300 employees could eat. So then we started donated to food banks and we started delivering and we actually have a delivery mechanism that sends them to all our branches.

Todd Nagel: And to give you an idea, we’re in rural America. So our most Southern branch to Northern branch is six hours away. So when the vegetables start growing, the Nicklaus Farms deliver, which are our owners deliver vegetables to all our branches. And then we distribute them to employees, customers, and then whatever’s leftover, go to food banks. So imagine walking into an IncredibleBank branch and leaving with a dozen ears of sweet corn. That doesn’t happen, right? So that’s just kind of fun. That’s how we get involved in the community.

Todd Nagel: And then our IncredibleBank Foundation is a charitable organization that our owners donate over $500,000 a year into the foundation. And I’m trying to keep the balance up. But every year they spend every dollar. So it’s more of a charitable giving fund as I call it. And we give back to the communities we serve, these deposits really started in the communities that we serve and they should be recirculated in the communities we serve. So it’s a lot of fun to be involved with. And our employees will volunteer at the farm and pick vegetables and deliver vegetables. And when you walk into a food bank, being a bank with bags of vegetables, for people that you’re helping, it’s really a lot of fun. We’ll actually have people come to the bank and say, “We heard you guys give vegetables here, we don’t believe our neighbor.”

Sean Keathley: They don’t believe it.

Todd Nagel: So, we’re like, “Here’s some cucumbers, man. Here you go.”

Gina Bleedorn: And by the way, I have two, 4X8 foot gardens that are an immense amount of work in my backyard. And so I’m here to qualify that you’re far beyond the garden’s size, but also the fact that you do the things you do is well incredible. But also the fact of the number of times you’ve said the word fun. You really have fun. You create and cultivate a culture of fun. You exude that to your customers, to your employees. How do you keep banking fun?

Todd Nagel: That’s a great question. Because banking by nature is boring. I’ve probably said that three times too. And I just was thinking and our teams think about how can we make sure our employees are having a good time because it’s not the most exciting work in the world. And there are fewer customers coming into our locations. That’s just a fact. And so some of the people that we have are really social, they’re social monsters. So we do things like, okay, we pop popcorn. There’s a bunch of banks pop the popcorn, but how many banks go out and deliver 100 bags of popcorn to businesses on a Wednesday, you walk in with a hundred bags of popcorn. People are like, “Well, what’s the deal?” “We’re just bringing you popcorn.”

Todd Nagel: So, we just try to have fun. One of the other unique things that we did, because we’re always trying to tell people to deliver a concierge experience, which is something that someone’s not expecting. One of our bank managers put a freeze-e pop through the tubes on the drive-through. So I’m like, “Wow, that was interesting.” He said, “It was a really hot day. It didn’t work out real good though Todd, because they started to melt and then the tube got stuck. I’m like, “Well, it was a cool idea.” We have this thing called the Sunshine Award. So we sent them a nice card with $100.

Sean Keathley: I would know while we’re helping you rethink the drive-off experiences because your freeze-e pops have ruined all your pneumatic tubes.

Todd Nagel: That’s exactly right. But I think you have to be empowered to do stuff like that and don’t get me wrong. We’re a very serious organization because we’re taking care of people’s money, but we’re in the customer service business and we need to make people’s day. And I think in order to do that, you have to be positive. And some days people come to work and they just don’t feel positive. So if we can all laugh a little bit and have some fun, there’s no reason why you can’t have fun at work.

Sean Keathley: I’m trying to think of somebody you remind me of in terms of a company and I have to leave the financial sector. I mean maybe a Nordstrom’s comes to mind, someone who famously doesn’t have a return policy. In Nordstrom, one of their big successes is an intentional focus on the customer, but there’s also just amazing empowerment of the employee. Is that a part of what you do to make this company-wide, is you lead people by example, but you must empower people to live this brand. Then it’s a living, breathing thing for your organization.

Todd Nagel: Yes. And what we learned is we do have a charitable foundation, but what we learned is, and that becomes formalized and you have to apply for the dollars and so on and so forth. But then we’ve got these branches in widespread geography. And so we said, “Hey, we have to start giving like $5,000 to each branch and let that market manager donate that money in their communities, the way they want to do it. How would we know down here at corporate, who we should donate to, in their community.” So we learned that Sean.

Todd Nagel: We also learned the same thing with sponsorship dollars that even though we have a nice, awesome, centralized, cool marketing department, that we may not know who to sponsor in a community three hours from here. So we give that market manager their own sponsorship budget, and they can do what they want as a part of IncredibleBank. Those are things we learned along the way. And then the employees like, “This is the greatest thing in the world.” Well, duh, then all the employees in that community rally around it, and it becomes a much more significant event for the community and for the employees. And so generally most of our foundation’s gifts we give or we try to give to organizations that our employees volunteer for. And that’s, I think how some of this empowerment happens.