Growing banks: An interview with Greg Steffens, president and CEO of Southern Bank in Poplar Bluff, Mo.

Southern Bank, based in Poplar Bluff, Mo., was named to SNL Financial's listing of the top 100 community banks for 2010. It ranked second among all publicly traded community banks in the U.S., and 13th among all public and privately owned community banks on the list. Southern Bank was chosen based on its profitability, asset quality, efficiency and loan growth. Business Today caught up with Greg Steffens, president and CEO of this award-winning bank.

Business Today: What brought you to this position at Southern Bank?

Greg Steffens: I joined the bank in February 1998 as the chief financial officer and assumed the role of president and CEO in May 1999 after Mr. Donald Crandell retired. The reason I moved to Southeast Missouri was that I was the CFO for First Savings Bank in the Springfield, Mo., area, and it was acquired by what is now Regions Bank. I wanted to continue to work for a community bank and thankfully had the opportunity to join the team at Southern Bank.

BT: How has Southern Bank changed and grown in that time? What about the banking industry overall?

GS: When I joined the bank we were approximately $150 million in assets and focused primarily on residential lending. Over the last 12 years we have focused on growing other types of loans while maintaining our residential lending expertise. The other types of lending that we really expanded included commercial real estate and agricultural, commercial and industrial loans. Today we have approximately $700 million in assets and serve our market area through our 17 locations.

Greg Steffens, president and CEO of Southern Bank, based in Poplar Bluff, Mo. (submitted photo)

Over this same time period the banking industry has grown significantly, as well. However, over the last several years the banking industry's rate of growth has slowed considerably due primarily to a significant increase in problem loans as borrowers have had financial challenges as our national economy has weakened and experienced the worst recession since the Great Depression. Thankfully, Southeast Missouri and Northeast Arkansas have weathered this financial storm much better than the country as a whole, due in part to our diverse economy and our slower but more stable rate of economic growth over time.

While the vast majority of our local community banks have weathered the financial challenges of a poor economy very well, several institutions did experience challenges. From these challenges, we were able to successfully acquire two different banks in Northeast Arkansas that contributed significantly to our growth. These banks were Southern Bank of Commerce, headquartered in Paragould, Ark., and First Southern Bank, headquartered in Batesville, Ark. Southern Bank of Commerce was acquired in July 2009 and First Southern was acquired in December 2010.

BT: What are the fastest-growing areas of the bank? Why?

GS: Our fastest growing area of the bank has been our agricultural lending over the last several years. We attribute the growth primarily to the expertise of our agricultural lending staff and the success of our agricultural community. Our agricultural community has generally done well over recent years due in part to considerably increased commodity prices. This in turn has contributed to increased borrowing needs for farmers, as input prices and land values have all increased as well.

Generally, we believe our agricultural and commercial lenders do an excellent job of understanding our existing and potential future customers' financial needs and provide valued input in their financial decisions.

BT: Tell us about your ranking as one of the top community banks for 2010. What does it mean to your bank and to the communities it serves?

GS: It is rewarding to be recognized for our achievements. It is a testament to the quality and dedication of our team, and we are honored by the recognition. We further believe that it demonstrates that we are successfully meeting our various communities' financial needs in a professional and appropriate manner.

BT: What is your banking philosophy? What do you think makes you so successful?

GS: Our banking philosophy is predicated on the need to serve our community and meet its financial needs, which in turn will help us meet our financial needs. We cannot be successful without the communities which we serve being successful, and we must be an integral part of that success. We believe in being a financial partner and not "doing a transaction" with a customer. Historically, many of the strongest communities in our country have been centered around a strong banking system, and we believe that our company, as well as many of our competitors, provide this for our market area. Without the availability of credit, it is difficult for a community to grow and expand.

BT: What do you see next for Southern Bank?

GS: We will continue to do our best at meeting the financial needs of our current and future customers and communities. We also will be opening a full-service facility in Springfield, Mo., as we continue our expansion. In addition, we will continue to look for opportunities for continued growth. To help with this growth, we have filed a registration statement with the Securities and Exchange Commission for a secondary stock offering. We are already a publicly traded company, traded on the Nasdaq under the ticker symbol "SMBC," but we plan to raise additional capital to help us achieve future goals.