Your bank should fit your needs
First of all, review the qualities of the bank. What does it feel like when you enter the bank? Are the employees smiling? Is there someone new to help you each time you enter the bank? Do they show an interest in you?
Also, do the employees seem more interested in what is on their desk? What does the facility look like? Is it clean? Does it look like there is pride in the work environment?
Ask for the mission statement to determine what is important to the bank. What authority do the employees you deal with have? Can they reverse a fee, approve a loan or are decisions centralized at some higher level?
Is the bank making changes, such as updating its Web site, renovations or new products? Answers to these questions can help you determine if the bank is a good employer, fair, efficient, looking for better ways to serve and fun with which to do business.
The second issue is, of course, what products do you need and which bank can meet those needs. Every commercial bank is a "deposit-taker" and "loan-maker." If all you need in a bank is a place to park money or borrow money, any bank will do.
It’s worth checking fees and rates for the best deal and you may want to consider how loan decisions are made. Some banks have an automated scoring system, others involve a review by someone outside Alaska and others are reviewed locally.
If convenience is a factor, review the locations available and methods of product distribution. Large banks can allow you to visit a branch while traveling statewide or nationally and are great for that Alaska student attending a college away from Anchorage.
Other convenience features to ask about are the ability to deposit or borrow money through a bank’s Web site. Also, does the bank offer online banking? Can the bank receive your payroll electronically? How does the bank respond to telephone inquiries? Will the bank come to your place of business to pick up deposits, discuss loans or address other needs?
Many banks offer a much greater portfolio of financial services than others. Some examples would be financial planning, trusts, investment management, credit card processing and even insurance.
Finally, consider the safety of the bank. Often, answers to the first issue will provide clues: Employees smiling could imply the bank is doing well.
What are ways to determine the safety of a bank? Chartered commercial banks are highly regulated. Financial statements are delivered quarterly and are available to the public.
Rating agencies review banks quarterly and provide a "safety" grade. Do not take one agency’s rating at face value, however. Each rating agency establishes its individual grading scale. As any bank lender would tell you, "Get behind the numbers to determine the true financial condition."
The three most widely known rating agencies that review Anchorage banks are Bauer Financial, Veribanc and Weiss. Each weighs risk differently.
A recent example showed a local bank with satisfactory ratings from Bauer and Veribanc, but a weak rating from Weiss. Another received the highest rating from Bauer, "good" with Veribanc and barely "above average" from Weiss.
As with any outside analyst’s review, don’t use a grade assigned by a rating agency as your reason for a decision. The safety grade assigned to a bank each quarter should prompt you to ask further questions of the bank.
The bottom line is: Pick a bank that you like, that feels good to you, that you enjoy going to and that fits your needs.
Ron Kukes is president and chief executive of Alaska First Bank & Trust. He can be reached via e-mail at ([email protected]).