SunTrust's NCBS division moving in high-growth mode

In the 18 months since National Commerce Financial Corp. was acquired by SunTrust Bank, the in-store bank consulting division SunTrust got in the deal has been expanding.

Among the changes are a near doubling of the staff from 18 to 30, a complete renovation and expansion of office space, new and expanded services and a new logo and marketing materials

"It was desperately needed," says NCBS president Cliff Davis.

Most of the staff additions have come in the sales area, where NCBS has added sales offices in Atlanta, Phoenix and Houston, and there has been a strategic effort to coordinate communication between the sales force in the field and client services.

The sales and client services staff developed a plan to proactively reach out to clients through either phone, e-mail, streaming video, Web seminars or in-person visits, says NCBS chairman and CEO Dave Hunter.

That's all possible because it now has the resources it didn't have even a year ago.

"The end game is there is a higher cross-sell opportunity with existing clients and outreach to create new clients," Hunter says.

The effort hasn't produced any major returns yet, but it's coming, he says.

"There's a lot of people in the pipeline now that weren't there two years ago," Hunter says.

SunTrust also invested heavily in revamping and expanding NCBS's training materials with the aid of six training curriculum design contractors, Hunter says. About 58 new training courses were added, giving NCBS 208 hours of online courses available to clients in a range of areas including sales and regulatory and compliance.

In addition to training, NCBS consults, develops materials and research for hiring and designs, builds and manages in-store construction projects. It has worked with more than 300 financial institutions, from large national banks like Bank of America and Wachovia to banks with $80 million in deposits.

In the in-store bank consulting field, NCBS really has only two other competitors; ironically, both are headquartered in Georgia, home of SunTrust. Financial Supermarkets, Inc., is a subsidiary of Community Bank & Trust formed in Corrnelia, Ga., in 1984. Norcross, Ga.,-based International Banking Technologies is an independent in-store bank consulting firm started in the mid-1980s.

At times, having a division of SunTrust help competitors with in-store retail branches has been an issue, Hunter says, but there is a well-guarded wall between NCBS and SunTrust when it comes to sharing competitive information.

Hunter, who headed up the private banking division at SunTrust before being named chairman and CEO in April 2005, says there were many areas of overlap in the SunTrust/NCF merger, but NCBS was not one of them.

SunTrust has invested "medium six figures" on the physical expansion and office upgrade of NCBS alone, Hunter says, going from 6,500 square feet to 12,000 square feet on the fifth floor of One Commerce Square in Downtown Memphis.

Hunter says SunTrust had no bank consulting subsidiary and its investment in NCBS is proof of how significant it feels the subsidiary can become.

A report published in October by the consulting and research firm Celent found in-store banking is growing far faster than traditional bank branches, at a rate of 16.2% versus 1.1%.

"With startup costs of only 10% to 20% of a traditional branch, it's hard not to look at these types of branches as an engine for growth," says Bart Narter, author of the report and senior analyst in the banking group at Celent.

NCBS's own research backs that up. Between 2000-2005, the number of in-store branches grew 40.4% to 8,572.

Davis says from the time NCBS was founded in 1987 to just a few years ago, growing the business "was like shooting ducks in a barrel."

"We couldn't answer the phone fast enough," he says.

Now, Davis says, and Narter's report confirms, the market is tightening as the number of retail locations for in-store banks is shrinking. Growing the business means being more of a one-stop shop.

City National Bank in Charleston, W. Va., with 67 branches in three states, made the decision to get into in-store banking in 2004 after consulting with NCBS. City National opened in four Wal-Mart Supercenters in 2005 and is planning to open in two more this year.

"When you embark on a new venture you go with the best," says Tim Quinlan, City National's senior vice president for retail banking.

NCBS helped City National with every aspect of the project, from designing the bank's in-store model to developing pay ranges, training, sales, operation manuals and marketing materials.

Quinlan learned of NCBS through Davis, who worked in the West Virginia market for then National Bank of Commerce. He's learned more about the company and the industry by attending NCBS's annual Retail Banking Conference, which this year is being held July 10-11 in Chicago and where Quinlan is sending a team of five bankers.

"Based on our prior experience, we wouldn't dream of opening an in-store office without working with NCBS," he says. "They're that good."

NCBS
In-store banking consultants for SunTrust Bank
Chairman and CEO: Dave Hunter
Local employees: 24
Address: One Commerce Square, Suite 501
Phone: (901) 523-3128
Web site: www.ncbs.com

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By Christopher Sheffield
Memphis Business Journal

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