Magazine article American Banker

BB&T Blazed a Trail for Autonomous Units

Magazine article American Banker

BB&T Blazed a Trail for Autonomous Units

Article excerpt

As BB&T Financial Corp. grew into a sizable regional banking company through acquisitions, chairman John Allison did not go what might have seemed the conventional organizational route.

Rather than consolidate and centralize wherever possible, Mr. Allison restructured the company as much as practical into smaller, locally based units.

Thus, BB&T is less a $7 billion-asset holding company than a collection of autonomous community banks, now with more than 200 offices in North and South Carolina.

By restraining the community focus and avoiding the depersonalization that afflicts larger enterprises, BB&T was a trail-blazing advocate of the super community strategy.

Focus on Local Markets

Mr. Allison, steeped in the community banking tradition, believed that the most effective bankers, while benefiting from certain administrative controls and financial reporting from headquarters, must be totally immersed in their local markets.

For example, he saw a world of difference between Wilson, where the holding company is based, and cities like Raleigh or Charlotte.

Furthermore, bankers given a degree of freedom would perform better than those under the tight rein of the holding company.

"We've seen centralization strategies fail time and again," Mr. Allison said recently. "The most successful banking companies, regardless of size, are going to be the ones that stay close to their communities by empowering their bankers to meet the local needs."

And so he sought to strike the right balance between centralization and decentralization, with a reporting and incentive system that rewarded profitable performance in the various community outposts.

Network of Advisory Boards

But even here, BB&T put a different twist on the idea of super community banking.

Finding it cumbersome to establish separate banks with separate charters in every locality, Mr. …

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