Q&A With… Paul Thompson, CEO of Country Club Bank

Posted September 26, 2024

Q: Give us a brief assessment of what drove growth at your company this past year, or, absent growth, factors that helped position you for it in the next cycle.

A: We credit our continued growth in all aspects of our business to our strong culture and consistent business delivery model. Our underwriting discipline has allowed us to sustain lending efforts in this phase of the economic cycle while many of our competitors were on the sidelines. That creates a virtuous cycle of addressing existing client needs and attracting new clients who have experienced disruption in their (former) banking service provider. Our commitment to our cultural values has enabled us to attract and retain top talent in the market. By attracting mid-career bankers and training our younger associates, we are well-positioned for steady growth in the future.

Q: Specific to your sector, not your own company, what’s the outlook for the rest of this year and 2025? Red hot? Lukewarm? In between?

A: Probably somewhere in between. The 2023 rapid spike in interest rates in the face of inflation caught bankers and clients off guard (mainly because the Fed reversed themselves). Our industry has stabilized after a brief period of tumult (SVB failure) in 2023 and we are anticipating a gradual lowering of rates for 2024. We have observed how difficult it is to predict rates with precision, but Fed Chair Powell has indicated that the time has come for short-term rates to be lowered. This will provide relief to consumers and small businesses who have credit tied to the Prime Rate. The financial markets have responded to Chair Powell’s comments and softening inflation metrics as evidenced by the yield curve flattening (normalizing). The 10-year Treasury, to which mortgage rates are correlated, has dropped over 125bps, so the housing market should respond favorably over the coming quarters. Signs of recession have abated and the job market has cooled, so confidence should remain solid, but not red hot. A soft landing is achievable, but we are prepared to adapt to any of the economic scenarios that may play out.

Q: We have the streetcar extension, a new vibrancy on the riverfront and a new airport. What should our next big civic agenda item be as a metro area?

A: Our headquarters is on the Country Club Plaza, so we are thrilled about the Streetcar extension. Having seen what an economic development driver the streetcar has along the existing route, we believe that it will spur growth in the Midtown area. Country Club Bank financed the first two urban infill apartments on long-standing vacant lots that were a direct result of the Streetcar. I think the next “big thing” is for our city to perform and show well for the upcoming World Cup games. I’m also excited about some of the things I have heard that the new ownership group has in mind for the Country Club Plaza. The Plaza is one of our city’s crown jewels… I’m excited to see some much-needed attention and momentum being focused there.

Q: Is AI affecting your organization’s operations? If so, how? If not yet, how will it?

A: AI has the power to have a tremendous impact on a bank’s operations… Both positive and negative. As we incorporate it into our operations over time, AI (a/k/a, machine learning) will allow us to perform routine tasks more efficiently and expediently… increasing overall customer satisfaction and that’s a big positive. On the other hand, bad actors are also trying to harness the power of AI… spoofing telephone calls to impersonate customers (and banks) by using AI voice-overs hoping that banks will believe that they are talking directly to customers (and more often, visa-versa!). Bad actors use AI to spoof websites, emails, and text messages all in the hopes of getting access to our client’s money. Of course, we are aware of all of that and, accordingly, we’ve beefed up our own operational processes and procedures to verify that we are dealing with our actual customers and protecting their hard-earned money. If used appropriately, AI could have a great impact on our operational teams, which could lead to an increase in customer satisfaction!

Q: What cues or clues tell you a managerial job candidate brings the right combination of skills and cultural fit?

A: Obviously, competency is a given requirement so we also look for EQ (emotional intelligence). Self-awareness and empathy are critical. We look for people who exhibit–and are committed to–our company core values which are expressed in our acronym, ACE IT: A – Achievement; C – Compassion; E – Excellence; I – Integrity; T – Teamwork. Again, competency in business is a given but also the ability and willingness to develop and coach up others on their team.

Q: What’s harder as a leader: Hiring or firing? And why?

A: If you do it well, the first minimize the second. They can both be challenging but hiring is probably more difficult because of the unknowns. Most of the unknown is whether the competencies and core values of a candidate align with those of our organization. Letting someone go or “firing” is never easy. That said, we feel the compassionate thing to do is to let someone know if it isn’t working out so that they can get on with their lives and find the place of employment that is best suited for them and that affords them the best opportunity for success as soon as possible.

Q: Do you anticipate adding staff over the next year, holding the line on numbers, or potential reductions?

A: The number of our associates will not change materially in the next year.

Q: What’s your current employee headcount in KC? What about overall?

A: 444 and 451.