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Approaching $1B in Assets, Prime Meridian Bank’s Culture Leads the Way

A Conversation with CEO, Sammie D. Dixon, Jr.

Sammie D. Dixon Jr.

Vice Chairman, President and CEO

Prime Meridian Bank






Interview conducted by:

Lynn Fosse, Senior Editor, CEOCFO Magazine

Published – February 28, 2022

CEOCFO: Mr. Dixon, what is the philosophy of banking at Prime Meridian Bank?

Mr. Dixon: Our philosophy goes back to good old-fashioned relationship banking. If we can continue to build on that and become our clients’ first thought when it comes to banking, that is the way we want to do it.

We are sitting today at $841 million in assets – just under $1 billion. We are a liability-driven and asset-minded company. Anybody can build up a book of loans. Deposits are where your core franchise value lies. Relationships allow us to build up those low-cost deposits.

The philosophy of some banks, for instance, is to be a leader in technology. Our technology is excellent but being first in the pool on some of the fintech products is not necessarily a good idea, especially as a sub-$50 billion bank.

CEOCFO: How does relationship banking manifest itself and how would working with your clients be different at another bank?

Mr. Dixon: Our entire culture is surrounded by a one worded question: “why?” Anybody in the Bank – teller, personal banker, literally anyone -- can question why we are doing x y and z, whatever it is.

If you allow people to question what is going on, they learn the “why” and develop a better understanding of what we are doing. On the flipside, if someone asks me or any of our management team why we are doing something -- and we cannot answer them -- we might need to stop right there and rethink it. “Why are we doing this?” and, “How do we get it right?”  You start with a philosophy that is open and transparent.

Of course, everybody wants transparency right up to the point when they have to look at themselves. But if you can achieve that open, transparent relationship with your team, it translates into a better relationship with your clients and prospects.

We cannot do everything our clients and prospects want us to do. And if we cannot, we are going to sit down with them and go through the numbers and explain why.

We have a saying on everybody’s desk and in front of the teller line that reads, “Let’s think of a few good reasons why it can be done®.”  Then we apply a three-way test:

1) is it right by the client?

2) is it right by the Bank?

3) is it legally, morally, and ethically correct?

If all three of these answers are, ‘yes,’ then there is nothing we cannot do.

If number three is a “no” (legally, morally, and ethically) then we are done. If one or two are a “no” then we backup and figure out if there is another way we can do this. Having that relationship-based mentality when dealing with a client -- and telling them exactly what you are doing, and why you are doing it -- goes a long way. Unfortunately, in today’s society we have lost a lot of that kind of thinking in banking and life in general.

CEOCFO: What geographic area do you cover?

Mr. Dixon: Today we are in north Florida in Leon and Wakulla Counties. (Wakulla is an adjacent county to the south of us).  We are also in central Florida in Lakeland/Polk County. All markets are doing well. The real estate market remains strong and there is a lot of liquidity in the system due to the stimulus programs.

Florida never shut down. We are completely different than, say, New York or California. Having the comeback was not that difficult. We just keep our head down and hands on the plow and keep moving forward. We will work things out as we go along. The markets are holding up nicely.

CEOCFO: What is the customer mix at Prime Meridian Bank and would you like to see it change?

Mr. Dixon: No, we like where we are right now. As a commercially-focused community bank we do a lot of commercial real estate. We do a good bit of C&I lending. We do a good bit of 1 to 4 family. Our true consumer lending is less than 2%. It is just very difficult to compete right now with the credit unions on the consumer side.

CEOCFO: Do you do much outreach or how do you reach out to potential customers?

Mr. Dixon: Shoe leather. It is all about going out to see people. It is about constantly sticking with it and we go build that relationship. There is no mass marketing. There are no gimmicks in banking. Sure, there are banks that pull some advertising gimmicks. We’re just old-school, get out, meet people, and help them solve problems and achieve the goals they have in front of them.

CEOCFO: Are people surprised you still do that today?

Mr. Dixon: Oh, yes ma’am. When people come into our offices, they are immediately greeted from about three or four different people. We make fresh cookies in the Bank every day. We offer bottled water and hot coffee. Our overall philosophy is when someone walks in the Bank, we want them to feel they are walking into our living room. That kind of hospitality goes a long way.

We have more people than you’d think that come through our branches just to see our team. We know their name, but it is all about relationships and the culture you create with your team. My number one client is my team. If I take care of them, they will take care of our clients.

CEOCFO: What is different about how you treat your staff and what is it like working at Prime Meridian Bank?

Mr. Dixon: It is open and honest. If you are looking to come in and hide behind a desk, this is not the place for you. If you are willing to learn and grow and can take constructive criticism, you are going to love it.

I believe in managing by walking about and spending time with the team. This allows people to ask questions on anything we are doing the same way the rest of our executives and management would.

Someone once said to me he did not understand how we had grown the Bank and were the fastest-growing Bank in Leon County history.

He asked how we did it.  I said, “are you asking me what our secret sauce is?” He said, “yes.”  I told him I never thought about it that way, but it is very simple: we do not take ourselves that dadgum serious. If you treat everyone with humility, and respect, there is nothing you cannot achieve. It’s really a simple concept. We keep our heads down, our hands on the plow, and just keep moving forward.

If you go back into the 70s and 80s, we had people depositing checks every day. You heard all these people talking about branches going away.  Well in the last few years, J.P. Morgan Chase built three branches here in Tallahassee alone. My thing is pay attention. Keep your head on a swivel and watch what is going on around you. Do not try to be a loss leader. But don’t stick your head in the sand either. Stay nimble enough to act.

We have a saying around here that was spoken by retired Army General Eric Shinseki. The saying is framed on the wall of every conference room and board room. It says, “If you do not like change, you are going to like irrelevance even less.” That is the way we operate around here. If we run across new information and change is required, we change.  New information: new decision.

CEOCFO: What might have changed in your approach over time? Did you start with this philosophy day one?

Mr. Dixon: I am an open book. I love people. I love being around people. I love helping solve problems. My career started with NationsBank in credit underwriting, and I received phenomenal training in Charlotte and Fort Lauderdale with a great group of people. I helped start a bank in Naples and then went and took over a small bank.

Later I started to put Prime Meridian Bank’s business plan together. Everybody starts with, “Okay, what are we going to do?” I love studying bank business models. I had been a lot of places and saw the way the other banks did it. Instead of following those models, though, I decided to start with what we do not like and throw that out. Doing that let us build a model people could grab hold of and feel they had ownership. In my opinion, the more you give someone the more ownership they feel.

CEOCFO: Do you see the need for additional branches?

Mr. Dixon: Over time, yes, as we expand into other markets, whether through acquisition or de novo branching (starting a branch from scratch under our flag). Our strategic plan is to continue to grow organically, look at acquisitions and at de novo branching in different markets.

CEOCFO: Are you open to whatever works?

Mr. Dixon: Someone once asked my favorite type of loan? My answer has always been, “a good one.”

CEOCFO: What is the competitive landscape with other community banks in your area?  How do you stand out?

Mr. Dixon: It goes back to relationship banking. Being empathetic. Not taking ourselves too seriously. Treating people with humility and respect. Everyone is going to go through bad situations, and as long as they tell us the truth, we are going to do everything we can to work with them. We are patient. We are big on, “hurry up and wait,” and constantly being able to reassess.

We are like that defensive back on a football team that keeps their head on a swivel, to make sure they do not get blindsided. We all run about the same speed. So, if you just pay attention to the details, and do the big things right, you’ll just keep moving forward. We do not judge ourselves against our competition. We judge ourselves against our potential -- what we think we are capable of. It is just a different way to look at who we are.

CEOCFO: How have you helped your clients as well as your staff through COVID, and in general how do you help your clients when they are having a hard time?

Mr. Dixon: We did 1,376 Paycheck Protection Program (PPP) loans. Of those, 645 were to non-clients. Everyone was encouraged to go with their own banks but some of the banks had difficulty while we were open and ready to roll. We moved along even though the rules changed on a daily basis. That’s the nimbleness we talked about. We communicated a lot, internally.

Of those 645 non-client loans we moved over in excess of 248 relationships and that is huge. People talk, and when you are there for them, they tell others. It continues to work itself through and you build that relationship.

One of those loans turned out to be a very strong relationship. I asked him why he went to a different bank before he came here? He said they moved over during the banking crisis to “too big to fail.” I asked why they were moving to us? He said, “because during the COVID crisis that other bank was too big to care.” The silver lining of all this is that it has been very beneficial because we stayed nimble and did what others could not.

We had a client who had a serviced-based operation and fell on hard times in different circumstances. The client was very upfront with us and upfront with its landlord. It took us about seven years but we worked through it and collected every penny, every late charge … everything. It goes back to the empathy and being able to understand what your clients need and what they are doing.

On the flipside, we had a client that lied to us and we went after that individual aggressively. As soon as you lie to me, we are done. But, if you tell me the truth, I will work with you for as long as it takes.

CEOCFO: Would you tell us about your recent earnings and how Prime Meridian is doing these days?

Mr. Dixon: Earnings for 2021 were $8.4 million -- which was almost double the previous year. As I said, PPP has been very good for us. In 2021, it was a pretty significant income driver, along with a credit to our loan loss reserve. We had built them (reserves) up during 2020 in anticipation of the unknown and were able to gradually release them in 2021 which flowed to the bottom line.

Our credit quality continues to be very strong. We have no problem loans pending on the balance sheet. Past dues are next to nothing.

Going forward, the challenge is to backfill the $3-plus million worth of PPP fee income. We have quite a bit of cash as does every other financial institution. Managing our balance sheet and getting after it and finding loan opportunities is the key. Good loans are out there. We see a return of loan demand and are continuing to build on new relationships, existing relationships, and just be who we are.

CEOCFO: Does the potential increase in interest rates concern you or do you see it as necessary?

Mr. Dixon: Inflation is real and this whole transitory myth was more politics than it was true economic data.

We are currently asset sensitive and run our asset liability models monthly and use them to make decisions. Our goal is to stay neutral no matter where rates go. We are not making a bet on anything. Rates do not have anywhere to go but up.  We have been told for the last ten years rates are going up. It is going to depend on what the Fed does and how they look at it and if they go simply data-driven or if they take a more political approach.

The data-driven model would tell you we need to start raising rates. I think there is a consensus in the market that there are four rate hikes baked into 2022. If you have some of these packages the administration is looking to push and you pump that much money into the economy, that is very inflationary.

However, most of that is going to have to be borrowed, so, in that case do the politics take over and rates stay artificially low? We are looking at it and trying to stay in front of it. With our philosophy of managing our balance sheet to a neutral stance that has been very beneficial. Today we are well-positioned to benefit in a rising-rate environment.

CEOCFO: Would you tell us about community involvement for the bank and how you decide where to focus your efforts when there are so many places that need help?

Mr. Dixon: The first thing you have to do is find the passion within the Bank. What does your team -- and those who are going to be directly involved -- what are they passionate about? You can have all kinds of community involvement but if nobody cares it is just writing a check. We are very passionate about financial literacy for impoverished to lower income populations. Helping them move forward is our priority.

We are very passionate about the Boys and Girls Club and have a lot of volunteers who go and volunteer. We financially support the United Way and Big Bend Hospice and the local hospital (TMH). It goes with the passion and where you are volunteering or giving your money. There are an awful lot of great organizations out there that need financial support. However, you cannot give to everybody. The first criteria for us is do we have someone in the Bank truly passionate about the endeavors of the not-for-profit?

CEOCFO: Why choose Prime Meridian Bank?

Mr. Dixon: We are a relationship-driven company that puts our clients first. We are constantly trying to improve our efficiencies which has resulted in a nice return. We have averaged about 20% compound annual growth since we opened. It is about constantly focusing on our clients and shareholders. You cannot have one without the other and if you view them equally, you can accomplish great things.

We are very respectful of our resources and our expenses. We value relationships and the trust our clients have in us. And, finally, we try constantly to move the Bank forward. It is a combination of looking at your client and your shareholder. With the number of banks left from an investor standpoint the scarcity value becomes more and more promising.

Prime Meridian Bank | Sammie D. Dixon Jr. | Community Bank Stock | Tallahassee Florida Banks | OTCQX: PMHG | Approaching $1B in Assets, Prime Meridian Bank’s Culture Leads the Way - A Conversation with CEO, Sammie D. Dixon, Jr. | CEO Interviews 2022 | Community Banks | Crawfordville Fl Bank, Lakeland Florida Community Banks, Prime Meridian Bank Press Releases, News, Facebook, Instagram

“If you treat everyone with humility, and respect, there is nothing you cannot achieve. It’s really a simple concept. We keep our heads down, our hands on the plow, and just keep moving forward.”  
Sammie D. Dixon Jr.