Smaller Banks Continue To Cash In On Hometown Business

Opening in June, The Cardinal State Bank in Durham will be the first community bank to appear in the city in 25 years. With so many bank mergers, the bank's founders believe consumers are left with little in the way of personal service.

"The community bank's mission, quite frankly, is to build on that personal one-on-one relationship -- to bring back to our community that hometown banking," says John Mallard, Chief Executive Officer at Cardinal State Bank.

"Typically, the larger banks will rotate people between banks and in six months, you won't see a single soul you knew before," says W. Harold Parker Jr., Chief Executive Officer at Cardinal State Bank.

Since opening in 1921, Mutual Community Savings in Durham has prided itself on knowing its customers by name. The bank believes it distinguishes itself from the competition by providing a personal relationship that paves the way for loans.

"I think the biggest difference between us is I'm trying to determine how I can get to do it while someone else is trying to determine if they can do it," says George Quick, CEO at Mutual Community Savings Bank.

In less than a year, 1,100 shareholders invested in Cardinal Bank, and it raised nearly $12 million in capital. The founders believe that is proof the community supports the concept.

"By vesting, they will also bring business to us, which is a leg up as we go forward," Parker says.

Cardinal State Bank also plans to open a second branch in Chapel Hill later this year.