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The Benefits of Community Banking
River Hills Bank is a family owned financial institution located in Port Gibson and
Vicksburg, Mississippi. Founded in 1840, the Port Gibson Bank -- as it was originally called -began as a response to local demands. Its rich background includes surviving the Civil War,
operating as a military hospital, and enduring the Great Depression. The bank has been in the
Gage family for four generations, dating back to before the Civil War. Its small town roots have
helped form a reputation of reliability and friendliness. Local institutions like River Hills offer an
experience unlike that of larger, more commercial competitors. They offer history, superb
customer service, and a well-educated staff of employees who care about the community.
In 1916, Judge R. D. Gage returned to Mississippi from Texas and purchased the
controlling interest in the bank. Members of the Gage family have run the bank ever since,
bringing consistency and loyalty to their customers. The current CEO, Robert D. Gage IV, took
over the family business immediately after graduating Law School at the University of
Mississippi. After his father became ill, Gage found himself running the business at the young
age of 28. The banks named changed from Port Gibson Bank to River Hills Bank in 1999, when
two branches were built in Vicksburg, Mississippi. The expansion of the bank helped the
business grow from a $65 million to $155 million. Gage said of the growth: We felt people
there needed a local, regional bank and we sold stock locally.(Lofton 29)

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To be able to compete with large banks, River Hills Bank uses four business strategies:
professional costumer service, hiring local people from the community, flexibility in their
services and products, and local people making local decisions. Together, these strategies
produce a well-rounded, successful bank that larger competitors have trouble keeping up with.
The major advantage of smaller banking is its professional customer service. Walking
into a welcoming atmosphere provides customers with a sense of security and comfort.
Employees are more than willing to sit down one-on-one with the customer and work out a plan
that fits him or her. River Hills Bank knows its customers on a friendly level unlike large banks
where account holders are just names in the computer. Most engage with community banks for
this very reason: they make the customer feel as if his business is wanted.
Gage said, Its harder for smaller banks to keep up with the constant changes, but River
Hills Bank will remain a community bank. A lot of people want to bank with community banks
that are not big and all over the place. We arent the bank for everyone, but some still want the
kind of service we provide(Lofton 29,31). However some people arent aroused or interested in
banking with smaller banks for many different personal reasons. The narrow-minded one might
think that because the bank is small and non-commercial the business might go under or struggle
during tough economic times. The reality is most community banks usually stay strong during
tough times; in fact the community bank has a significantly less chance of suffering a major loss
or bankruptcy in hard times. Reason being the community banks depends on its self and its self
only, in contrast to the commercial banks which are dependent every branch including corporate
headquarters. In a situation were one branch of a commercial bank is loosing business it affects
the company as a whole, or vice versa the headquarters is in trouble which affects every single
branch and the whole corporation. In fact River Hills Bank even survived the Great Depression,

only shutting down once in its history when General Grant with his forces marched through Port
Gibson in 1864. This tale is just one example how River Hills Bank strong backbone has endured
through the thick and thin of times wear and tear perpetually thriving for more generations to
The employees at River Hills Bank are active members in the community. Having local
people from the surrounding community working in ones business is a key method to attract
local, loyal customers. The sense of community provided at banks like River Hills allows for a
more personal form of business. Allowing the employees the ability to personally know and
understand their clients from opening a new account or requesting a mortgage loan. Larger
competitors typically hire people that just look good on paper knowing nothing of their personal
background or work ethics. Thus, customers dont know whose hands their money is being
trusted in. This makes it more difficult for people to have accountability and trust in the company
its self. For example you wouldnt walk downtown and just find the best-dressed person and ask
them to babysit your children, you get recommendations for reliable and respected individuals
right for the job. Additionally, local establishments have a reputation for less turnover, meaning
employees usually stay for long periods of time. Respectable people like Gage, who began
working their career as young adult, offer a friendly face and the assurance of recognition which
people should look for in a bank.
Small banks with rich history provide a break from the one-size-fits-all approach that the
rest employ. River Hills Bank and other smaller banks are more flexible in the services and
products they present. Suppose a farmer needs a loan for new equipment and goes to a
commercial bank first. Not all of those banks offer agricultural loans so he then goes to a

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community bank. There, they see those types of loans every day because farming is a major
business in the community.
The community bank is more flexible on many levels including making a loan payment
plan that fits ones economical status, mortgage loans, car loans. This is evidence of the banks
ability to adapt to change quickly. What if there is a sudden death in the family and a customer
fell behind on his or her loan payment? Being that River Hills Bank is as flexible as it is, that
customer could sit down with a loan officer and work out a plan that would keep payments from
falling behind. Its hard for other banks to keep up with competition when they use general
theories that in fact fail to meet everyones needs.
One more advantage that community banks have over commercial banks is that the
decisions the bank makes are done to adapt to the changing local community and are made by
the local people running the business. In commercial banks, if one branch wants to make a
change they have to send off the request to the headquarters, where a final decision is eventually
made. Its easy for the concern of the customers to get lost in this process. When local people are
making the changes, they are doing it not for power or more money but to ensure customer
satisfaction and meet local demands. Being able to make changes quickly gives the community
banks the edge they need to stay a step ahead of the rest.
Gage has often said that the banking business is about relationships. River Hills holds this
principle close to its heart, and is it is likely the secret to its success. Banking is more than a
transaction of money. Its a transaction of trust and hope. A small town bank cannot survive
without its community. For this reason, such institutions hold a strong appreciation for their
customers. Simple banking with solid goals often yields spectacular results. River Hills Bank is a
testament to this and an example of the benefits of local business.

Without the availability of community banks and the services they provide, the banking
business would turn into a monopoly in a sense. Big corporations focusing on constant expansion
would run all the banks and the only concerns would be for million dollar investors. This style of
business leaves customers with little to no say in the relationship. Local banks care about the
community. They minimize the distance between customer and provider, and for this reason,
priorities intersect more often. Through a focus on service, history, community, and relationships,
locally operated financial institutions are able to satisfy the maximum amount of needs and ease
the lives of customers.

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Works Cited
Lofton, Lynn. Gage carries on four-generation tradition of banking.
Mississippi Business Journal. May 16, 2005. 29.

n.p. River Hills Bank. 2007. March 25,2011