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Small banks find a market // Emphasis placed on personal service

James "Bud" Stalnaker Jr. still remembers a visit he made to thedrive-through window of a local bank in 1987. From the time Stalnaker pulled up with a check until he drove away with a deposit receipt, the teller never looked up. Stalnaker got a "thank you" over the microphone, but there was never any eye contact.

"I guess that's the first thing that made me realize the importance of customer service," recalls Stalnaker, who spent about 13 years in banking before a 1987 hiatus.

The drive-through experience also was the first thing that got Stalnaker to think about opening a bank, and two years later he is president and chief executive officer of the Community National Bank of Pasco County, a bank where the emphasis on service is so strong that Stalnaker voluntarily acknowledges choosing his employees for personality first and technical ability second.

Community National is the latest in a steady stream of locally owned banks to open in Pasco during the past few years, and as illustrated by the eye-contact anecdote, the bank adheres rigidly to the personal service credo of community banking.

The new banks have opened with hopes of filling a void created when large, holding-company banks began swallowing up local banks in the mid-'80s, and many have used improved service to try to lure small business and others as depositors and borrowers.

Special attention

The way small bankers tell it, they can offer specialized attention, quicker response on loan applications, and plenty of smiles at the

drive-through window, which all can be difficult for a large bank to maintain.

"You look for a need that is not being served. The small businessman, the professional man, the retiree was not being served," said Loue E. Stockwell Jr., president and chief executive of the 2-year-old Citizens National Bank and Trust Co. in Port Richey. "It costs (larger banks) as much to handle the $100,000 loan as the $100 loan."

The less-tangible qualities are particularly important, since small banks often cannot provide many of the attractions of their larger competitors. If a customer wants numerous branches, multimillion-dollar loans or just a wide range of financial products, he often has to look elsewhere.

In the case of Community National, service sometimes even has to compensate for higher interest rates on loans. In an effort to attract deposits, Stalnaker has bumped up interest rates and tacked some of the extra cost onto loans.

While Pasco's big bankers do not subscribe to all of the service claims the little banks make, they don't deny that a market exists, particularly with small businesses.

"We actively compete against them, but they can effectively compete against us in that segment," said Rodger Ingram, president and chief executive of Barnett Bank of Pasco County until a transfer last month. "Size-wise, they're not as competitive as some of our larger competitors, but when you put them together as a group, then they become a good competitor as to the actual numbers."

One of the most frequent small bankers' claims is that their customers are fed up with the constant employee transfers the big banks make, but Ingram points out that before moving to Pasco, he spent 28 years as a Brevard County banker.

Tough competition

In many ways, Community National is fairly typical of Pasco's new breed of small banks. The bank is capitalized with $4-million that was paid in by 190 shareholders, who largely come from the East Pasco business and professional community.

The largest shareholder, James H. White of Haines City, owns only 6.25 percent of the shares. White is the former president of Flagship Banks Inc., which sold its Pasco banks to Sun Bank in the early '80s.

Stalnaker began his banking career with Flagship and continued working for Sun Bank of Pasco for several years after the buyout.

By opening Community National, Stalnaker is betting that the reputation he earned back then will help attract enough customers to keep the bank healthy, despite heavy competition on all sides.

"It's a good market for a well-run bank," Stalnaker said. "I was not concerned building another bank. I felt if I had enough of a personal customer following, and we got our share of the market, we would be okay."

While Bill McGavern is not betting against Community National, the chairman and chief executive of Sun Bank of Pasco does think the new bank could saturate the Zephyrhills market.

McGavern points out that banking has become enormously competitive since the deregulation of interest rates, and that Zephyrhills already is home to one small, local bank - First National Bank of Pasco County - as well as a full contingent of larger banks.

"It's tough to maintain the kind of profitability that banks were used to. The days of opening your doors and letting it happen are over," McGavern said. "If you were asking me if I were interested in starting a bank right now, the answer is no."

PASCO PROFILE JAMES S. "BUD" STALNAKER JR.

Occupation: President and chief executive, Community National Bank of Pasco County Born: Sept. 28, 1954, in Spokane, Wash. Grew up in Haines City Family: Married, two children Residence: Zephyrhills Hobbies: Golf and hunting Last book read: Confessions of an S.O.B. by Al Neuharth Latest accomplishment: Opening Community National Bank Drives: Jeep Cherokee

New local banks in Pasco County Bank Headquarters Date opened First National Bank of the South Wesley Chapel February 1984 First National Bank of Pasco Dade City November 1986 Peoples State Bank New Port Richey December 1987 Lake State Bank Land O'Lakes July 1988 Citizens National Bank and Trust Port Richey December 1988 Community National Bank Zephyrhills November 1989 Source: Florida Bankers Association

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