Performance Consulting
SC+S Helps Simmons First Corporation Achieve Efficiencies
Simmons First Corporation has grown over the years from the lead bank in Pine Bluff, Arkansas to eight separately chartered affiliate banks with 84 locations, all in Arkansas. Tommy May, CEO and Chairman of the Board of Simmons First National Corporation and David Bartlett, President and COO, knew it was time to make some improvements to their processes to achieve efficiencies by centralizing non-customer -related processes, which would help them meet the corresponding objective of giving the appearance of one bank to their customers.
After some analysis and reference research on consulting candidates, Simmons’ senior management made the decision to engage SCS on the strength of SCS’ breadth of knowledge and expertise. Once that decision was behind them, they turned to getting buy in from the managers and other staff. Several “town meetings” were held where employees or “associates” as Simmons refers to them, were encouraged to work with SCS to make improvements. Bob Fehlman, EVP and CFO for the bank holding company, located in Little Rock and Marty Casteel, EVP-Administration for the bank holding company, in Pine Bluff, were identified as SCS’ main contacts.
SCS uses Action Team Approach to Implement Procedural Changes
In June, Bob Stevenson, Managing Director of Consulting at SCS, and his team set out to assist Simmons First in streamlining the process improvement and communication path among all eight affiliates by formalizing procedures. As Fehlman said, “Our main objective was to reduce our efficiency ratio and realize cost savings without negatively impacting our multi-charter model, customer service, internal control structure, or our staffing, which we don’t want to change except through attrition.”
Simmons First wanted to work with the existing organizational structure throughout the affiliate banks to implement new processes and procedures. Although this could prove challenging since the affiliates operated independently, with their own CEOs, Board of Directors, and separate bank charters, the SCS team proceeded with their plans to assess and identify opportunities and design procedures to address their objectives. In order to implement a wide range of procedural changes, the Sheshunoff team used their action team strategy to foster participation from employees who would ultimately “own” the new process.
Three separate actions teams were developed to concentrate on deposit operations, retail, and loan administration. The approach each of these action teams took was to examine every significant process in their respective functional areas to uncover opportunities to, for example, make forms uniform, eliminate redundant processes, or transfer tasks to more appropriate areas. Casteel said, “there was a bit of a rocky start in our loan administration and deposit operations area but after a few subsequent meetings, concerns of our key staff were alleviated and we continued forward.” “Our associates really liked the action team process-it empowered them to make decisions,” said Fehlman. “They are in the process of implementing most of the task force’s recommendations.” Simmons had delegated final recommendations to a task force that worked from SCS’s assessments.
To facilitate more standardized procedures, an “Action Team Leader” was selected to facilitate and lead each of the teams. Also, each affiliate bank had representation on each of the Action Teams.
Simmons First Expects to See Savings Well Into 2011
Simmons First’s culture given its size and multi-charter model, does not turn on a dime, but within ten week s into the engagement with SCS, Simmons started to see a straightforward path ahead of them. The SCS team was pleased to see that Simmons was able to move along as fast as it did. Over the course of the next several months, more than 350 precise procedures were developed regarding deposit operations, retail, and loan administration processes. Some recommendations were made to centralize tasks, other recommendations suggested ways to avoid keeping paper copies and electronic ones provided there were no regulatory rules requiring both. Many of them could be implemented on the spot, others required further research, and some needed further discussion among senior executives and more time to incorporate into the existing organizational structure. Overall, the majority of recommended procedures were implemented or will be in the near future.
“Sheshunoff helped us bring more of our back office into a centralized location where we now have compliance, loan review, audit, accounting, human resources, marketing and IT operations,” says Fehlman. “We’re still achieving savings and anticipate doing so throughout 2010 and into 2011.” Casteel said, “we could not have done this on our own or as fast as we did working with Sheshunoff at our side.”
Casteel believes that it was SCS’s dedication “to the process and their discipline that provided the greatest value." “Sheshunoff’s overall knowledge and benchmarking ability,” said Casteel, is what led Simmons down the right path toward these process improvements. And Fehlman concurred, “the SCS consultants were knowledgeable, very professional, and had the credibility needed to achieve our mutual objectives. Their discipline helped us keep our focus."