- Thought Leadership
Local impact, national reach: How Thread Bank is turning a nearly 120-year-old community bank into a digital vanguard
- threadbank_editor
It’s the question that everyone in the financial services industry is asking: Can the community banking model survive?
In the U.S., there are over 4,000 community banks, many of which continue to provide critical support for residents and businesses alike. In some cases, they may be the region’s only financial institution. If these economic engines were to close, it would likely have a devastating effect on the surrounding areas.
While most community banks are struggling to maintain relevance in an increasingly digital-first world, many are capable of modernizing to meet the demands of the next generation of customers.
That was the case with Civis Bank, a nearly 120-year-old institution based in Rogersville, Tenn. In 2021, we embarked on an effort to recapitalize and transform Civis Bank so it could re-establish itself as a leader in innovation and ensure its relevance for another century. And while we’re still at the beginning of our overhaul, the renamed and rebranded Thread Bank is already serving as a model for the future of community banks.
The relationship with the East Tennessee community we serve has never been stronger. In fact, the investment has helped to bring once-local members of the workforce back to the area they had previously left. Meanwhile, Thread Bank is also expanding its reach across the nation to give even more people access to the outstanding service long-cherished by residents of the northeastern Tennessee towns of Rogersville and Sneedville, the Bank’s traditional geographic footprint.
Here’s how we did it.
Why Civis Bank?
Like other similarly-sized financial institutions, the boom-and-bust cycle of the real estate market over the past decade morphed Civis Bank from a well-capitalized community bank to one on the brink of collapse. It was either partner, or close.
From our perspective – that is, Thread Bank’s leadership team and board of directors – transformation efforts were aimed at more than just a cash infusion. Instead, we wanted to revamp the community banking model by bringing in new technology that would allow these institutions to evolve from, but not forget, their brick-and-mortar roots.
Civis Bank stood out to us because of its deep connection to the Rogersville and Sneedville communities, and its long-standing relationship with many residents. Importantly, the limited geographic and technology footprint provided Thread a clearer path to invest in IT infrastructure. This flexibility and agility made it much easier for us to deploy our more advanced solutions. We didn’t have to worry that these systems wouldn’t work with older programs or infrastructure.
This is where smaller banks may actually have an advantage over larger rivals. With far less legacy IT infrastructure with which to contend, they’re able to move more quickly in deploying new digital applications, while still delivering a seamless experience for the end user.
It was also important we picked an institution with a very familiar regulatory history, which helped ensure a timely approval process. And ultimately, we needed an investment that we were confident would pay back an appropriate return in the coming years. Risk was a huge consideration.
Ultimately, our story is one of a belief in community banking and a commitment to being good stewards of a community institution – it goes beyond just seeking a bank charter. Our vision is to allow Thread Bank to remain a community bank, while deploying technology to revitalize and expand operations beyond the geographic paradigm that has limited countless community banks across the nation. Our strategy of efficiently leveraging our capital and resources has paid off thus far, as we have achieved consistent profitability while using considerably less of our initial investment capital than originally anticipated.
Keeping the customer in mind
In rebuilding Civis Bank, we had one goal: to center everything around the customer. Instead of forcing clients to revolve their financial lives solely around traveling to a physical location, or even to the Bank’s website, Thread Bank would provide embedded “digital branches” to meet customers where they live their financial lives or conduct their financial business. In essence, our goal was to shift the banking paradigm from being “about the bank,” as has been the case for most banks throughout history, to being “about the customer,” a more modern, convenient, seamless, and tech-forward approach.
This meant delivering a technology and risk-focused infrastructure, as well as a suite of applications that could handle customers’ diverse set of needs, while also ensuring an uninterrupted journey across these different systems. Each of these “threads” – whether it’s deposits, loans or payments – would need to weave together, creating a banking fabric that we could wrap around customers and partners to enhance relationships. This is really the meaning behind the evolution of “Civis Bank” to “Thread Bank.”
Getting the right talent
Alongside the right technology, the right leadership and talent were key. We needed individuals that could help us build each of these new digital components, and then create the right relationships between them to ultimately produce the outcomes that would drive the business forward. At the same time, we sought out those willing to challenge stale banking paradigms while at the same time embracing critical banking tenants that ensure regulatory safety and soundness.
To further cement the Bank’s legacy in the Rogersville and Sneedville areas, we hired local young professionals to help start or grow their careers, as well as elevated others to leadership roles. We also continued to build relationships with the existing, experienced team. We’re proud of the fact that we’ve been able to bring several talented Rogersville natives, who had left the town to work for global enterprises, back to their hometown to work for Thread Bank. With an eye to the future, our Embedded Banking Partnerships team is helping to identify the alliances that will help further enhance our digital offerings.
While we’re pleased our investment is paying off, it’s not just about dollars on the balance sheet. It’s about continuing to serve as an economic pillar for the Bank’s communities by offering financial products that will meet the demands of the new generation of banking customers, without alienating the needs of long-standing clients that rely on the traditional banking methods.
To deliver on this promise, and to therefore secure their long-term futures, nearly every community bank will need to embrace risk and step outside of their comfort zones. They must transform with the customer in mind. And as these institutions succeed, so will the communities they serve. It’s how towns like Rogersville remain vibrant for decades to come.