Somerset Trust Company
In his first banking job, G. Henry Cook, as a blossoming young college student in the swinging ‘60s, was tasked with sorting paper checks and placing them in alphabetical order.
During his second year as an undergrad at Franklin and Marshall College in Lancaster, his job at the bank was to manually enter charges in the bank’s charge card program. It was a time when, he joked, “I didn’t even know what a charge card was.”
Today, as the long-time President and CEO of Somerset Trust Company, headquartered in the scenic Laurel Highlands of southwestern Pennsylvania, he knows it’s a bold new digital world.
Although he admits he is a “fairly conservative guy,” leading a 128-year-old bank, his scorn for the tedium and the paperwork he was charged with processing so many decades ago has made him the technology enthusiast he is today.
As the last local bank in Somerset County, headquartered right along West Main Street, he embraces the younger set and challenges them to “scare me” with their ideas for innovation. He will often say, “This is too token.” He wants big-idea people, the dreamers and the innovators. Like his own managerial style, he wants them to never be satisfied.
Even before he ascended to the post of bank president at Somerset Trust Company in 1989, he said, “I became an addict about finding technology to do our jobs.”
His banker-father, who has since passed away, shared that quest for the cutting-edge.
This multi-generational love for the high-tech and the ultra-modern is why he hires millennials with such enthusiasm and encourages them to find ideas that frighten him a bit.
As Easy as X,Y,Z
His search for Gen X-ers (born between 1965 and 1984) and Y-ers, (born in the 1980s and 1990s) was inspired in large part by the bank’s own Human Resources person. The HR leader pointed out to Cook that if their leaders retired at the age of 65, the bank was on track to lose about 80 percent of its officers in the next 15 years.
It was a huge wake-up call.
Cook knew it would be a huge failure – and a source of enormous stress – to not bring young people on board.
Thanks to his foresight, he is staying ahead of the wave. According to the Brookings Institution, millennials will make up 75 percent of the U.S. workforce by 2025.
At Somerset Trust Company, millennials are not only valued and visionary co-workers, but cherished customers.
Attracting the young while keeping the old is all in a day’s work for Somerset Trust Company.
It’s an uber-contemporary approach for a fifth generation banker and a century-plus old bank.
The Early Days of Somerset Trust
With a network of 32 branches serving Somerset, Cambria, Fayette, Westmoreland, and Bedford Counties and Garrett County, Maryland, the independent community bank offers an extensive ATM network, consumer and commercial lending services, and an online and mobile banking platform as well as trust and investment management services.
The bank was founded in 1889.
The town of Somerset, described by a local newspaper at that time as “an aggressive mountain town”, was growing to reach a population of almost 4,000 residents. Businessmen and community leaders realized they needed a local bank if their community was to continue to thrive.
Congressman and Lincoln supporter Edward Scull, and the fourth of his six sons, George R. Scull, met that need for more than a century to come when they established what was to become Somerset Trust Company.
That independent community vision endures at Somerset Trust. Now under the leadership and guidance of the fifth generation of Scull family descendants, the bank has endeavored to enhance the traditional qualities of community banking by effectively using nontraditional technology to support excellent service to customers.
From the 1880s to 2017
“Businesses and small banks must reach out to millennials because they will drive the future,” Cook said. “We started recruiting energetic young people and let them float around the organization.”
“Millennials are critical to our bank’s future,” Marketing Director Roberta Lohr agreed. “Our workforce is growing and many are in the 20- to 35- age group. They will be the ones to carry on our bank’s long-standing tradition. It is imperative that we understand what motivates and challenges them as we develop a leadership team for the future.”
“We also look to our millennial group at Somerset Trust to guide us in developing products to help us gain a better market share among millennials in our footprint,” Lohr said.
The proof of the echo-boomers’ mark is an entirely 21st century way of banking.
“The bank’s mobile platform is a direct result of millennial input at the bank,” Lohr said. “It has made banking more convenient for customers of all ages, and especially millennials, by delivering banking services through smart phones, tablets, personal computers, and more.”
The bank has seen far less traffic at its drive-up windows as a direct result of mobile banking.
“Snapping a picture of a check to make a deposit or pay a bill is finding growing acceptance among customers, and especially millennials. However, we find that many customers still prefer personal banking when they apply for a loan or open an account,” Lohr said.
“Convenience is still key as we have streamlined the account opening process in our customer service areas. Plus, many of our branches are located where people shop and have extended hours to make access to a personal banker more convenient.”
The approach has translated into dollars and success. The total assets of the bank rose to $1.084 billion as of March 31, 2017 as compared to $1.020 billion in 2016. A second quarter dividend of $.33 per share was declared to shareholders of record as of the close of business on June 9, payable on June 20, making this year the 54th consecutive year of increased dividends for shareholders.
For several years, Somerset Trust has been recognized as one of the top 200 banks in the United States, based on the prior three years’ Return on Equity. In fact, they ranked in the Top 50. They have also been recognized as a Best Bank to Work For in America and a Best Place to Work in Pennsylvania. They have also received numerous awards for their contributions to the communities they serve.
“Somerset Trust has always stayed close to its employees and customers,” Lohr said. “We have an open dialogue with each other, and a non-bureaucratic organization. We make a point to listen to what our customers want and need and work hard to exceed their expectations. In the 1980’s, there was much discussion in our industry about the relevancy of community banks. Somerset Trust is an example of a community bank that has stayed relevant because it remembers its roots and the core of its business.”
The bank stayed relevant by giving millennials the freedom to chart their own customized trajectory.
They found twenty- and thirtysomethings “who had that spark, that extra energy, that intelligence,” Cook said.
“We’ve probably hired 40 to 50 young people in the past 15 years for their energy, not to fill a specific need,” he added. The bank has retained about two-thirds of them, which is an impressive ratio for a generation known to switch positions often.
“That gives us a vitality and an energy that helps us build for the future,” Cook said.
The iPhone Generation
Cook acknowledged that some people think millennials don’t work hard. They dismiss them as mollycoddled, self-absorbed job-hoppers, but, he insists, they couldn’t be more wrong. Millennials DO work; they just work differently.
For example, studies show millennials are engaged on their cell phones for a sum total of about 12 hours a day. He jokes that hospitals must be putting microchips in babies’ brains to keep them tethered to their phones.
He recalled how his wife and he struggled to buy their children a set of encyclopedias back in the day. They also bought the annual updates for that set. The kids hardly ever cracked the bindings.
Now, his kids “visit” Wikipedia several times a day—and so does he.
They know the online source is not always 100 percent reliable, but it is far faster and more accessible than “an impressive set of books sitting in your house.”
But knowing how the generations differ, he realizes that the bank must “realign the organization to engage in their world.”
For example, many millennials want to be in business for themselves, whether as a main career or a side business, Cook said. The bank can help if lenders speak their language.
Because commercial lenders have seen so many models, their skill is as invaluable as having an attorney or an accountant when a young entrepreneur launches a business.
“We can bring value-added expertise to them,” Cook said.
Today when the bank analyzes its transaction compositions, 88 percent are non-traditional delivery, mostly digital. Cook said even the most stodgy banks are at 40 percent.
Altered Roles and Rotating Pegs
As a result, that online presence “redefines the teller function,” Cook said.
“(Today’s tellers) must be problem-solvers instead of transaction specialists.”
It also redefines the life of the aspiring banker.
“We all fill holes on a peg board,” Cook said.
If a square peg is inserted into a round hole, “we try them in multiple different holes, and we try to expand the hole a bit.”
Bouncing from hole to hole and department to department is encouraged at Somerset.
He often puts new young employees on teams of three to five and tells them, “Go out and design something that scares the heck out of me.”
That daring streak is what has earned the bank national recognition for their cutting-edge mobile platform.
One team told him the bank needs to redesign their website. That conclusion evolved into a major website revamp and mobile banking.
Now, they have one of the best mobile banking products in the U.S. and they are not done yet. They just brought out a new release.
“Here’s what we can do,” Cook said. “We can use the online mobile world to balance and reconcile your account.” The computer even knows where you left off in your balance reconciliation.
Customers can also take pictures and store them digitally. If you buy a new car, all that dog-eared paperwork can be photographed and stored digitally instead of being shoved into a narrow glove compartment.
They also launched “Picture Pay” which is now spreading to other banks.
You can merely take a picture of a bill and the bank automatically pays it.
For the last 15 months, the bank offered total fingerprint access, and customers can turn on and off their ATM cards to prevent identity theft. They can turn on the card only when they use it, then turn it off in case it gets lost or the numbers are stolen.
The customer will have the same functionality as a credit card company, turning off the card to completely protect themselves, Cook explained.
A Hard Look at Software
In his 40 years of banking, the many changes he has seen have been of “enormous magnitude.”
That reminder of progress comes when he and his employees beta-test major software systems.
When he partners with major software companies, he always has the same “standard line:” “We are your worst nightmare or your best customer,” he warns them.
And a year later, the company executive always seems to come back and say, “Yeah, you weren’t kidding.”
The reason is simple: “We are not going to be satisfied with the status quo. We’ve driven ourselves very hard.”
He says he often gets the sense that many community bankers mourn the good ol’ days and are checking off the days on the calendar until their retirement.
But not him. “I believe our best days are coming.”
“Our past is wonderful. We try to honor our heritage and exhibit a passion for serving our communities in the present, so that we can energize them for the future,” Cook said.
In May, the bank was a finalist for a national financial technology award. Bank Director Magazine awards a Best of FinXTech Award to the financial institution that exhibits innovation, growth by revenue, customers of reputation and strength of integrations. Somerset, partnering with BOLTS Technologies of Bethlehem, PA, recently launched a new account opening system, which substantially improves the process.
The system was applauded as intuitive and convenient, dramatically reducing the time and redundant steps of a traditional account opening process. Customers can seamlessly move through the process from the desktop to the tablet, as well as a mobile device.
The Group of Eight
Cook reminisces about an equally intuitive core group of eight who came to the bank in the 1970s and working together, transformed it over the next 40 years.
Thinkers and dreamers from about 15 other banks later joined them to build something great.
“It’s been a really, really wonderful ride,” Cook said.
Half of the eight have retired, and others are preparing to retire. “We were the foundation builders,” Cook said thoughtfully. “Now young people are taking the tools in their own inventive hands.”
“The eight of us were the rock.”
Today, one of those tools is Facebook.
“One of my shake-me-up groups said we need to use social media more,” Cook said. So they did.
He realizes now how often the information must be updated constantly, daily and immediately.
So what’s next for the bank?
“If we knew what was next for the bank, we’d already be doing it,” Cook said.
He recalled a quote that his friend used to utter often, though the quote was not original to him.
“The biggest problem in American business is that we deal with the urgent at the expense of the important.”
He encourages his fellow banker-friends to “back away from the crisis of the moment and build a stronger system.”
For Somerset his main problem was not problem loans or assets and liabilities. It was a looming wave of retirements that led to a fountain of youth.
Community giving is a key component of his stronger system.
“I believe community banks that take the word ‘community’ seriously have an ace in their hand,” Cook said.
“Imagine if you played poker and you had an ace in every hand. You’re probably going to have a pretty good night.”
Somerset Trust has led the community in honoring the hallowed fields where Flight 93 plummeted from the sky on 9-11. The town embraced the families of the victims and spearheaded the design of the memorial.
This past Fourth of July, they sponsored fireworks for 17 different communities they serve.
Many customers joked, “Are you coming to see your fireworks?” He traditionally watches the fireworks in his own hometown but knew a fireworks display in each town “is part of the reason people feel their community is special.”
“We are passionate about our communities. That’s our ace,” Cook said.
“Technology is our second ace. Imagine if you had two aces in every hand.”
Cook has stood alongside local leaders many times with large ceremonial checks in hand over the decades.
When he gave $1 million to University of Pittsburgh-Johnstown’s new Idea Lab, he insisted the check–at $1 million, Somerset Trust’s largest ever–was not a donation, but an investment in the future.
That program now carries the Somerset Trust name. An innovators’ workspace is now called the Cook Family Idea Lab in honor of the banking bloodline that has fueled Somerset Trust for generations.
There, students from business, theatre, engineering, and other courses of study brainstorm together.
Utilizing whiteboards, writable tabletops and high-tech printers, student entrepreneurs can craft ideas into innovations they can pitch to investors.
It’s all part of a larger, growing entrepreneurial program that includes “Shark Tank” project presentations to local business leaders and a Showcase for Makers event that will allow the young innovators to pitch their inventions and ideas.
The “Thinking Bank”
Cook recalls a noted guest speaker who spoke at a training years ago. The speaker was dubbed the “regulator from hell” at a time when savings and loans were collapsing under foul winds.
Cook never forgot what that regulator-speaker said: “I can go to a town and in two minutes tell you if their community bank is doing their job or not.”
Taking risks, empowering a locally trained workforce, making the town more robust–”That’s our job.”
He also recalled this quote from a representative from the Federal Home Loan Bank, who said, “You’ve created a thinking bank.”
They generate intellectual energy from the top of the pyramid to the bottom.
“By beta-testing software, we are all part of the teaching process,” Cook said.
He finds this digital-age embrace amazing in a sleepy place that is not a college town or an overly academic environment.
“We are former farmers, coal miners and steelworkers,” Cook said. “But there is so much intelligence among them.”
“We’ve been able to bring out the professionalism within them and to a level they didn’t know they have. It is enormously satisfying.”
“There’s no better job in the world than being a bank president in a community with an identity,” Cook said. “We are their financial stewards. We bring what they need.”
“We won’t always bat 100 percent, but if we do it right, the community will give us a chance to make a good living. I believe that with every fiber of my being.”
The many community awards and national recognition he and the bank have received are wonderful, but the recognition by the community is the best, Cook said.
The community of Somerset never gave out awards to businessmen, but they did for the first time ever–to honor Somerset Trust Company.
Council presented the bank with an “Extraordinary Business” award.
The bank that loves invention had an award invented for them.
“They never did that before. Every community pats us on the back in some way. It means to me that we are all succeeding at engagement.”
That engagement includes the entire age spectrum, from the very young, to the young in heart and mind.