First Citizens Bank is Banking on Strong Relationships with Small Businesses

July 19, 2022 by Gary Stockton

Experian is delighted to speak with Phil Hains from First Citizens Bank for the Small Business Matters podcast this week. As America’s largest family-controlled bank, First Citizens Bank has been supporting consumers and small businesses across the US for more than 120 years. They operate more than 600 locations in 22 states and recently merged with CIT Group, making them one of the top 20 US banks.

Watch Our Interview

What follows is a lightly edited transcript of our interview.

[Gary Stockton]: As America’s largest family-controlled bank, First Citizens has been supporting consumers and small businesses across the US for more than 120 years. They operate more than 600 locations in 22 states, and recently merged with CIT Group, making them one of the top 20 US banks. Phil Hains is the Senior Director of Business Credit for the bank. Welcome to Small Business Matters, Phil.

[Phil Hains]: Thank you, Gary. Glad to be here. Thank you for having me.

[Gary Stockton]: So could you tell us how First Citizens is supporting small business?

[Phil Hains]: Yeah, I would say we are supporting small business in several ways, and I’ll be kind of broad and then maybe even a little bit more specific, but really that primarily we support small business through our bankers, through our branch network throughout the country. As you mentioned, we have 600 branches across 22 states in the country, and we’ve delivered that brand. We’re concentrated here in the Southeast–North, South Carolina, with branches from east coast and west coast and beyond. But it’s our bankers working with our clients to help drive solutions that manage, help them manage risk and manage their opportunities. That really is kind of the primary driver of how we help small businesses. You know, you mentioned that we are the largest family-controlled bank in the country, and that gives us kind of a special insight, I think, into how small businesses and privately held businesses and large companies as well, manage their risk and manage their opportunities.

[Phil Hains]: We grew from a single branch in Smithfield, North Carolina, to the branch network that we have today. So starting as a small business and becoming as large as we have over the 124 years like we’ve done, it gives us that kind of unique perspective, if you will, into managing a family owned or family private enterprise. Thinking really what’s gone on in the last two years, we were fortunate to work with our clients, our customers, to deliver 34,000 PPP loans–paycheck protection loans through the SBA, to our clients. And I think that’s just another reflection on being there for our clients over the long-term through different periods and being able to help them out through that, through that process.

[Gary Stockton]: So what are your small business clients? What do you think they value the most about First Citizens?

[Phil Hains]: Yeah, I’m going to sound like a broken record, but I really think it’s our bankers. I think it’s the value that they drive in building relationships, building trust with their clients over the long-term. I think it’s also about our bankers building those relationships internally with, you know, our subject experts, whether it’s credit experts that I have in my group or it’s treasury experts or it’s wealth experts, or it’s risk management experts to help our customers manage their risks, help them grow their business over time. But it starts with that foundation of trust that our bankers build with our customers. And I think that’s just really kind of the primary thrust, the primary focus of what our bankers are out there doing. They’re the face of our organization, but they represent a lot of people and a lot of expertise behind the scenes.

[Gary Stockton]: So what should a small business have in place before seeking out funding with First Citizens?

[Phil Hains]: Well, I think that depends on what they’re after, and the size of the business that they have. But I think certainly, a strong foundation of good credit history, both of their personal scores and their business scores. I think that’s really important. I think it’s important to have a plan. Obviously, you know how the funds are going to be used? How are the funds going to help them succeed or manage their costs or expand their business? And helping our bankers understand what that is, what that looks like. And then of course, being really well organized and having and good financial information on the history of their company and where it’s been and what it’s done. I like to always say that our bankers, when they’re talking to our customers, they’re gathering the story. They’re telling the story of their customers in the financial information that we gather on the customers to do the underwriting, we do helps connect the dots between the story of the customer and really the outcomes that the customer has, their ability to repay the loan as we go through our analysis. So I think it’s important to have really all three of those aspects in place.

[Gary Stockton]: Yeah. Yeah. Very important. So as interest rates rise, fintech rates will rise. Is First Citizens viewing this as a win-back opportunity?

[Phil Hains]: Well, I really think economic cycles bring their own unique challenges, and every economic cycle does that—challenges and unique opportunities. And I don’t know that it’s necessarily fintechs that we’re trying to win back business from. I think we try to use our experience, our long experience and our history of working through economic cycles like this, to both drive loyalty in our existing client base, so that hopefully they see the value of working with a bank that has been through these cycles many times. So whether it’s fintechs or whatever competitors have been out there historically, or might be out there in the future, it’s more about the cycle than it is about where the competition is. That’s a process.

[Gary Stockton]: Gotcha. So with record numbers of new businesses forming, there were 5.4 million in 2021; how are you dealing with the new credit seeker?

[Phil Hains]: So it’s about having the bankers in front of them to help them prepare for the loan that they’re seeking, but it’s also about having the products available to them. We have a wide range of credit products, a wide range of sizes of those credit products from small check line reserve accounts or overdraft protection accounts, to large lines of credit–credit cards, equipment financing, and real estate financing, we are ready for all of that. I think those are the things that we have available to make available to our clients through the CIT merger that you talked about. We have a really expansive and very robust equipment finance program that we offer to our clients, and that’s an indirect lending program that we offer through manufacturers or dealers on a private label, or a co-branded solution that really gets equipment financing into the hands of those small business customers.

[Phil Hains]: And they may not even know it’s us, obviously, if it’s a private label branding. We also do SBA financing, traditional 7a financing through the bank; SBA 504 is another program that we also are very actively engaged in. So that helps small businesses that maybe aren’t quite ready for that conventional financing need. And we need to seek that additional guarantee to give them the boost, give them a leg up, and then you eventually graduate them into more of a conventional financial borrower for us.

[Gary Stockton]: Yeah. I was struck by the variety of financial products that you offer on your web site, particularly on the real estate side of things. What, what is the forever first promise? Can you talk about that?

[Phil Hains]: Well, it has to do with our history. It’s about being there over the long haul, over the long-term for our customers. And it started out as a branding strategy that was reflective of who we are as a company. It’s the long-term approach that we take with our clients. But the interesting thing about forever first that I see is that it really has reinforced, or re-energized within our company and our associates, that whole promise of forever first and being there for the long term for our clients. It’s about valuing relationships and making sure that we build those relationships over time, and that we’re going to be with our customers for the long haul. We’re 124 years old now, and continue to grow those years of service.

[Gary Stockton]: I would imagine that you are adapting as your customers adapt; I mean, mobile is taking off in big ways, right? A lot of financial companies are adapting. How has your mobile strategy evolved?

[Phil Hains]: So we use our mobile strategy, I think, as a compliment to the overall strategy that we have with our customers. This is going to sound cliche, but meeting them where they are and giving them the solutions to be able to manage their kind of day to day activities on their accounts with their tablet or with their phone or their computer, manage their risks, manage their deposits, manage what they need to do. But that’s a complimentary service from the mobile strategy through our customer contact center and through our bankers to really help support our small businesses. I think what we find is that where our clients are concerned, business customers really want to have that strategic discussion, that bigger picture discussion, and it’s important to have the banker engaged as well. So, so the digital is a complement to what we do.

[Gary Stockton]: So how does First Citizens embrace diversity, equity and inclusion? It’s a big theme these days, particularly with bankers and at Experian; I mean, we’ve got a huge focus on diversity right now. How are you embracing that?

[Phil Hains]: So, so I really think it’s just the way we interact with one another. And I believe that, you know, diversity of voices, a diversity of thought and process into voices into the company, into the solutions really help drive better solutions. So it’s a practice, not just a theme, if you will. And I think when you have diverse voices and you celebrate diversity and you celebrate cultural differences, and you bring those in, you build that trust amongst the associates themselves. And then from the trust that you build by having and respecting those diverse voices, you drive towards that common purpose of success that you want to have, and you do that together. So we’re constantly evolving in our diversity programs, through our communication efforts, through our online resources, but really it gets down to kind of the day-to-day work we do with the diverse associate base that we have, but also that represents the diverse communities that we are in. Bringing that into the fold and make sure that we’re listening to those voices, respecting those voices, because that’s what drives really good solutions at the end of the day.

[Gary Stockton]: Yeah, absolutely. Well Phil, this has been very illuminating. Can you tell our listeners where to learn more about First Citizens bank?

[Phil Hains]: Well, I was saying the easiest place is to go onto our website firstcitizens.com and explore the different offerings that we have to explore the history and the people of our company, it’s a great way to learn a lot more about this bank. But we do have 600 branches too. So if, if we’re in a community that you’re in a visiting, a First Citizens branch is also another way to engage with us.

[Gary Stockton]: Fantastic. Thanks for taking time out to speak to us today Phil.

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