A Family Affair: Skalicky on Building a Bank as a Community
by Amanda Koprowski and Phil Neuffer Monitor 100 2018
Kelly Skalicky grew up with Stearns Bank. Now she is the president of the company. With a varied background as her foundation, she is uniquely qualified to continue the success her parents built at Stearns and position it for the future, all while maintaining a focus on small business customers.
Kelly Skalicky, President, Stearns Bank
Many children play pretend. Some pretend to be professional athletes, some to be heroines in science fiction stories. Then there are others that take on roles like doctor, police officer or astronaut while scurrying around the backyard. For Kelly Skalicky, her childhood imagination was fueled by a much different profession.
“I used to go in with my dad, and I don’t [know] if some kids would play other things, but I used to play banker,” Skalicky says. “I would go in, and he would throw his envelopes and stuff into the garbage, and I would pick them out. Then I’d go set a box up at home and play banker.”
While she may not have known she was predicting her financial services future back then, Skalicky put on many different uniforms before she took on her current role as president of Stearns Bank, a business her mother and father bought in 1964 and helped grow to the national small business lending and equipment finance power it is today.
Skalicky began her professional career far from the banking world as a middle school teacher, following in the footsteps of her older sister as she taught social studies and history to eighth and ninth graders. From there, she decided to go to law school and, after getting her degree, worked in a public defender’s office doing criminal law before eventually moving to the civil side. She also did work in Native American law with long-time friend and mentor Cate Stetson of Stetson Law Offices in Albuquerque, NM. While working with Stetson, Skalicky had the opportunity to work with tribes setting up internal corporate structures, organizational government structures and economic development opportunities.
While her career path branched in many directions, it all eventually came back home. After serving as counsel for Stearns Bank for a number of years, she came on-board full-time seven years ago as in-house counsel. The driving factor in her accepting a full-time role was Stearns’ rapid acquisition strategy, as the bank has acquired nine banks since 2009.
“We were acquiring a lot of banks, and it just got to be I was pretty much working full time for them [anyway] so it made sense to come on in-house then,” Skalicky says.
In her years as in-house counsel, Skalicky became even more intimately familiar with a company she, in many ways, grew up with.
“I started sitting on the board and then you get involved in lot of other aspects of the bank from that point on,” Skalicky says. “I was always pretty involved with the equipment finance division and then, obviously, on the loan side.”
Sitting on the board and becoming involved in all aspects of the bank made for what Skalicky calls a “natural progression” to her new role as president.
Foundations and Family
Skalicky has clearly built a successful career for herself, and she is now just as focused on continuing the equally successful trajectory of Stearns Bank. Ranked No. 50 in this year’s Monitor 100, Stearns Bank reported $1,191.8 million in net assets for 2017, up from $1,092 million in 2016. Additionally, new business volume surpassed $600 million for the bank in 2017, with originations from the vendor channel and the buy-desk both experiencing notable improvements.
While Skalicky was not president of the bank for that progress, her work as in-house counsel gave her the chance to support it and understand why Stearns is successful. As a bank bought by an entrepreneurial family in the 1960s, Stearns Bank itself has a small business origin story, sharing a major resemblance with so many of the customers it serves. Understanding on a very literal level what it means to run a small business gives Stearns and Skalicky a competitive advantage in an increasingly challenging environment.
“We know how small businesses operate. Our own company is a small business. We’re an employee-owned company,” Skalicky says. “We know how a small business grows because we grew as a ‘start up’ ourselves.”
The foundations Stearns is built on are not the only aspect of its success. The people within the organization are vital, and Skalicky is no exception. Taking aside her deep familial roots with the organization, Skalicky has been able to develop as a leader in numerous fields, humbly noting the help of mentors along the way.
There’s Stetson, with whom Skalicky still has a working relationship, noting she keeps in fairly frequent contact with her former colleague. She also points to U.S. District Court Judge Michael Davis, for whom she clerked for in law school.
But the mentors that Skalicky credits the most for her success are her mother and father, who formed what Skalicky calls a great team. Her father, Norm Skalicky, still serves as CEO of Stearns Bank.
“My mom was always very involved in the businesses. Not only was she my best friend, but she really mentored me professionally,” Skalicky says. “She loved marketing and selling ideas and she was really strategic in her thinking. Dad is a maverick — an inspiring, driven, ever-evolving entrepreneur. His drive, enthusiasm and love for business is the inspiration for all that we do and the core of our culture at Stearns. At heart, he’s a sales guy and absolutely loves calling on customers. Dad lives by and often recites Zig Ziglar’s quote: ‘You can have everything in life you want, if you will just help other people get what they want.’ He gets the job done and is doggedly determined above all else to find a way to get the deal done for the customer. He’s amazingly creative and a closer. And he moves fast, still working seven days a week!”
When it comes to running the business, Skalicky takes that sense of familial partnership into her new role. “I think one of the unique sort of governance aspects of our bank is that we really do operate on consensus,” she says. “There’s not really a silo of decision making.”
This also means looking at investment in different ways; not only as a way to expand the business, but to build an employee base that doesn’t just view the bank as a place to work but a place where they want to work. Among other incentives, Stearns Bank is employee-owned, giving workers an investment of their own in the business. The bank also provides support for continuing education and training, encouraging staff to pursue a greater knowledge base.
While Skalicky and the bank itself have had the backing they need, Skalicky wants to ensure that all people who work at Stearns are equally well supported.
“For us, our employees are our biggest asset and you’ve got to invest in that,” she explains. “They deserve to be well-trained and have all the training they think they need, in addition to what we feel they need.”
Technology and the Customer Experience
Technology has begun to play a larger role in how Stearns Bank conducts business, as it has grown from being a small bank to one with a national reach. Skalicky says the bank has formed a large technology team as it not only helps to make the customer experience more convenient, but combats new threats in the financial sector, such as cybersecurity.
But technology is not all Stearns brings to the table. Skalicky is a firm believer that person-to-person interaction drives better business and encourages return customers.
“When you’re starting a small business or you’re expanding and you need a new piece of equipment, and you’ve been working all day, and you’ve got to get something done, there’s nothing like being able to talk to a human,” Skalicky says. “Technology is a great convenience for customers, but sometimes it’s not as efficient as talking to somebody. That’s really a big part of what we do, and we’re really conscious of building that consistently throughout the organization.
“We say we answer on the first ring because we do,” Skalicky says. “We want you to call us. It’s great to have convenience 24/7 but there’s nothing worse in life than ‘press this button and talk to a computer,’ when you really want to talk with a person. Mobile access, digital payments and drop and drag convenience will never replace personal conversations at Stearns. We want our customers to know that if it’s important to them, it’s urgent to us.”
Skalicky preaches constant internal communication as well, as she boasts of an organization that does not have silos of decision making. While she is still involved in the legal department, her expanded role relies more heavily on her wealth of risk management experience, which is important as she views credit quality as the biggest risk to the bank.
In addition to managing risk, Skalicky must be ready to adapt to what’s ahead. Stearns Bank’s equipment finance division has worked primarily with traditional construction, medical, manufacturing, wood- working and machine tools, while maintaining a “sweet spot” of small-ticket transactions, but there is still room for expansion. For example, the bank just recently launched an up to $350,000 app-only financing to improve turnaround time, and a business checking account for small businesses which pays 1% interest on the checking account balance from $20,000 to $250,000.
There will, no doubt, be further enhancements in the future, since looking forward is not a problem for Skalicky and it never has been. She’s been doing it her entire life.
At the end of the day, however, it all comes back to the customer and the greater community Skalickly wants to build. To her, it’s less about selling a product than figuring out what’s right for the customers’ business and finding the best ways for them to expand, grow and succeed.
“When [our customers] are successful, we’re successful. And it can’t happen any other way,” she says. “That’s how Mom and Dad built the bank, and that’s what we believe in. That’s what our value is, and it’s worked.”
Relationships are the cornerstone of any business transaction, and broker/lender interactions are no different. Steve Geller outlines some of the basic due diligence and research brokers can perform to ensure their lender relationships are successful and long-lasting for both them and any potential borrowers.
Funder and vendor partnerships have long been a staple of the financing industry, and a good partnership can benefit both parties. But unexpected changes can catch vendors flat-footed, especially if adherence to their contracts won’t allow for adapting to new circumstances. Diane Croessmann examines some of the ways these partner programs work, along with what changes can cause them to malfunction.