The power of 'Q'

What a difference a couple of decades make.

Queensborough National Bank & Trust had 10 branch offices in rural Georgia and $200 million in assets when it first dipped its toes into the Augusta market with a small mortgage and commercial lending operation on Professional Parkway in 1998.

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Back then, it wasn't even called Queensborough. The bank still operated as First National Bank & Trust, the name it was founded under in Louisville, Ga., in 1902.

Today, Queensborough has more than $1 billion in assets, roughly half of which has come from the eight offices it has spread across metro Augusta's urban and suburban areas.

"We've certainly benefited from being here in the market," Queensborough President and CEO William Easterlin III said.

The community bank was founded 116 years ago by Easterlin's great-grandfather, who named the bank's holding company "Queensborough" after the 18th-century Scottish township that once occupied portions of Jefferson and Burke counties.

In 2006, the bank adopted the name to differentiate itself from Georgia's 37 other national banks.

"There is 'First National Bank this' and 'First National Bank that,' " Easterlin said. "The 'Q' brand is unique. There is no name confusion."

Among locally owned banks in the Augusta-Aiken market, Queensborough is No. 2 in deposits, behind Aiken-based Security Federal Bank, according to the Federal Deposit Insurance Corp. Queensborough, however, is No. 1 in assets.

Roughly 40 percent of its business comes from rural communities south of Augusta, such as Millen, Midville and Sandersville. The remaining 10 percent of Queensborough's assets are in Savannah, where it has four branch offices, two of which were acquired from CertusBank in 2015.  It is building a fifth in the suburban Savannah community of Pooler.

Queensborough has been on the offensive in Augusta during the past couple of years in an attempt to pick up market share from rival community banks snapped up by outside institutions, including First Bank of Georgia, which was acquired by Atlanta-based State Bank & Trust in 2015; and Georgia Bank & Trust – formerly the region's largest community bank – which was bought by Columbia, S.C.-based South State Bank in 2017.

Queensborough has stepped up marketing effort to promote its hometown roots, spending $778,000 last year on advertising, a 20 percent increase from the previous year, according to its annual report.

Easterlin said the legacy community banks remain the company's toughest competitors.

"They're good bankers," Easterlin said. "The ownership changed and some of the procedures have changed, but they're still the same bankers Jay Forrester (South State's market president) is an awfully good banker. And Remer Brinson (market president for State Bank & Trust) is, too. It's hard to win business away from customers who are satisfied with their bank. It just is."

Augusta is unique in that no local banks failed during the 2007-08 financial crisis, unlike Macon, Savannah and Atlanta. According to the FDIC, an average of 100 new banks were started annually before the financial crisis of 2007-08. The last start-up bank in Augusta was Savannah River Banking Co. – now part of Lexington, S.C.-based First Community Bank – in 2007.

Longtime Augusta banker Bill Thompson, a former SunTrust executive who who joined Queensborough in 2008 as chief loan officer, said Augusta's diversified economy and conservative residential construction industry moderated the recession's local impact.

"We didn't have this massive overbuilding, the massive development," Thompson said. "Savannah did, and Atlanta had the highest level in the country."

Aside from sheer size – Queensborough now has 27 branch offices – the biggest change for the bank during the past two decades has been technology. When the bank first entered the suburban Augusta market, telephone banking was still considered cutting edge. Then came internet baking in the early 2000s and mobile banking in the 2010s.

Like many small banks, Queensborough has its eye on mobile-pay platforms such as the PayPal-owned Venmo app. Large banks, including Bank of America, Wells Fargo and SunTrust, already have a digital payment network called Zelle. Easterlin said Queensborough is adopting a wait-and-see stance because investing in new technology can be costly, especially if consumers do not take to it.

The company's growth during the past 20 years coincides with stricter post-recession regulatory oversight. Increased volume has required the bank to expand its quality-control systems.

"If you're only making five mortgage loans a month, it's easy," Easterlin said. "If you're doing 75 a month, it's hard to know those things are being done properly. The transparency regulators are trying to bring is a good thing. It just gets overwhelming at times."

Thompson said many banks have curtailed, or even abandoned, mortgage lending and other consumer products, which has allowed credit unions and other non-bank businesses fill the void. According to the FDIC, six of the 10 largest mortgage lenders are non-bank institutions.

"Doing a residential mortgage loan is very labor intensive and fraught with potential mistakes that can cost you money," Thompson said.

But Queensborough has no intention of pulling back from the home-loan business. The bank even advertises in the Washington, D.C., area to plant the seed with military personnel and civilian contractors relocating to Augusta as part of the cyber buildup at Fort Gordon.

Queensborough also is targeting small and mid-sized businesses whose lending needs may not conform to the standards of larger banks, where decisions could be made outside the market.

"We can be more flexible and more responsive to a non-standard deal," Easterlin said. "We can get an answer quickly. That's where we shine."

As for Queensborough's future growth, Easterlin said the company has no immediate plans to expand outside its existing Augusta-to-Savannah footprint.

"We're not clamoring to establish a foothold in Athens or Gainesville or start inching into the Atlanta market, or even the Lake Oconee market," Easterlin said. "We have a lot of business still to do here."

QUEENSBOROUGH NATIONAL BANK & TRUST CO.

Headquarters: Louisville, Ga.

Founded: 1902

Chief executive: William F. "Bill" Easterlin III

Ownership: Privately held

Employees: 310

Offices: 27

Net assets: $1.125 billion (April 30)

Net earnings: $8.3 million (Dec. 31)