The People’s Bank of Bradbury

PSY 614 Case Study: People’s Bank of Bradbury

 

Henry Kepple was hired in 2001 as the president of the Peoples Bank of Bradbury (PBB), a small, locally

owned and operated bank in a relatively rural community. He came to the bank from a large, nationally

known banking system with strong credentials as a leader and change agent in the banking industry. His

former presidency was long-lasting and successful. He came to his new position for the challenge, after

reviewing financial reports that indicated the bank was financially sound and having been told by the

board of directors that they would support his vision of growth for the bank into a much larger lending

institution.

 

Shortly following his arrival, Henry learned that the bank was in serious financial trouble—bills were not

being paid, customers were unhappy, and the bank was having a very difficult time meeting payroll.

Also, he learned that several of the board members really did not agree with his plan to grow the bank.

PBB currently served as a feeder for several larger financial institutions in the surrounding counties,

many of whom offered services directly through PBB, and board members felt such a change in the

mission of the bank would result in bad relations with those other lending institutions within the

community and the state. Still, Henry was up for the challenge the bank represented and told the board

that he would stay, as long as the board gave him the control necessary to move forward with his

initiatives and do whatever was necessary to keep the doors open. The board agreed; however, many

board members then resigned, indicating that while they knew Henry’s ideas were necessary to ensure

the continued existence of the bank, they did not want to be associated with PBB if it would be

competing with other local interests. The bank moved forward with a board of only five directors,

trusting in Henry’s ability to do what needed to be done.

 

Within the next two years, Henry reduced the workforce by half, doubled fees, developed more efficient

lending processes, removed all competitors’ services and literature from PBB’s lobby, and changed the

name of the bank to disassociate from the negative image the old name inspired as well as reflect his

vision for the future. He assembled a strong leadership team, developed a new organizational structure

for the bank and its services, and obtained approval and licenses from all regulatory authorities to

expand operations.

 

Over the next five years, the bank’s number of accounts tripled and new customer service initiatives

were realizing measurable success. Henry was known as an intimidating leader who really did not care

what anyone thought of him or his practices. He was not viewed favorably in the community as a

person, but was credited with the turnaround of the bank. He developed the board of directors into a

large group of people who were interested in the future of the bank and proud to be associated with its

growth and success. With the board’s support and all approvals in place, Henry opened branch locations

in three different counties.

 

With respect to his leadership style, Henry did not believe in micromanaging people, so once the

foundation was in place for growth, he cultivated a supportive leadership team that admired his vision

for the bank and worked hard to realize that vision. He did not tell them what to do, but they often

 

 

sought his input and guidance in decision making, trusting his judgment and experience as a leader.

Likewise, the board of directors deferred to Henry’s judgment and vision as the bank continued to grow,

happy with the bottom line and the profits they were realizing.

 

As Henry began to talk of planning for his retirement, the board of directors discouraged him, concerned

about what would happen to the bank if he left as well as their ability to select a new leader who would

be as effective as Henry had been. Henry agreed to postpone his retirement plans, but he was less

visible in the bank as the institution grew and his interests became diversified. The next few years saw

another name change to reflect the bank’s status as a national lending institution, a rapidly growing

customer base, and the establishment of several more branch locations in other states. He moved his

family to one of the branch locations in hopes of retiring there one day and commuted to the main

office. Despite his frequent physical detachment from the main office, he was still viewed as

omnipresent, and his leadership team managed the day-to-day operations of the banking system. The

bank was financially stable, but Henry continually worried about the bank’s long-term survivability due

to increased regulation and competition, both locally and nationally. Despite the bank’s success, Henry

insisted his team always operate in survival mode, as though the success was only temporary and the

bank’s resources were tenuous.

 

While some of the bank’s employees did not agree with Henry’s leadership style and felt they should

have a stronger voice in the direction of the company, the bank continued to grow. With 100 full-time

local employees and a total of 700 employees combined, the bank had considerable influence on the

local economy. In 2011, Henry celebrated his 10-year anniversary as president of the bank. Soon after,

however, he received word that one of the bank’s locations and its vice president were suspected of

fraudulent activity and were under investigation. In March 2012, the bank was fined several million

dollars and the main office was visited by federal and state regulatory agencies in hopes of determining

if the issues experienced at the branch location could be indicative of systemic leadership issues and

processes. In August 2012, the board of trustees fired Henry Kepple, hoping to pull the bank out of its

difficulties with new leadership. By January of 2013, the FDIC took over all operations and subsequently

sold accounts and assets to another bank, which later closed the Bradbury location.

 

NOTE: The names of the bank and its leader have been changed to protect confidentiality.