Legacy Bank & Trust Doubles its Assets with Niche Strategy and Technology from Jack Henry
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Insights
The expansion of Legacy Bank & Trust reflects a strategic pivot towards niche markets that are often overlooked by larger financial institutions. By doubling its asset size within two years, the bank demonstrates a significant growth trajectory. This is particularly noteworthy in the context of the banking sector, where asset growth can be indicative of increased market share and customer trust. The focus on affordable housing, new markets tax credits and commercial banking, alongside geographic expansion, suggests an aggressive yet targeted approach to growth that could set a precedent for similar-sized community banks.
Furthermore, the bank's investment in Jack Henry's scalable technology implies a forward-looking approach to banking operations. The ability to automate processes and improve operational efficiencies can lead to reduced operational costs and enhanced customer experiences, which are critical factors in maintaining competitiveness in the financial sector. The bank's technological upgrade could serve as a case study for other community banks aiming to scale operations without compromising service quality.
The financial implications of Legacy Bank & Trust's growth are multifaceted. Asset growth, especially when it involves a doubling of size, can lead to a reevaluation of the bank's financial health and stability by investors and rating agencies. It's essential to consider the quality of these assets and the risk profile associated with the new niche markets. If managed effectively, this growth can result in higher profitability through increased lending opportunities and interest income.
However, expansion into new markets also introduces new risks, including the potential for higher default rates in underserved areas. Investors should monitor the bank's non-performing loan ratios and provision for loan losses in subsequent financial statements. The bank's success in these niche markets can also attract attention from larger banks, potentially leading to increased competition. Thus, the long-term sustainability of this growth strategy will be a key area of interest.
Legacy Bank & Trust's adoption of Jack Henry's SilverLake system underscores the importance of scalable and robust IT infrastructure in modern banking. SilverLake's hosted core processing solution likely offers the bank a combination of high customization, regulatory compliance and enhanced security features, which are crucial for banks targeting underserved markets with complex needs. The ability to integrate new tools and improve communication across branches can lead to significant improvements in customer service and internal workflows.
It's also worth noting that such technological investments may have a substantial upfront cost but can yield long-term savings and revenue opportunities. As the bank continues to grow, the flexibility and scalability of its IT systems will be pivotal in ensuring that it can adapt to changing market demands and regulatory environments without incurring prohibitive costs or experiencing service disruptions.
Open, flexible technology empowers focus on underserved communities and commercial banking, positions CDFI to continue strong growth
The 117-year-old
Legacy Bank & Trust has been running on Jack Henry systems since 2003. To meet its new strategic direction, the bank decided to revamp its technology stack, selecting Jack Henry's more scalable hosted core processing solution, SilverLake. It also added new tools to boost operational efficiencies, improve communication between branches, standardize compliance processes, and increase security. Today, the bank has competitive technology to enter new markets easily and create positive user experiences.
"As a long-term Jack Henry customer, we value their expertise, availability, and dedication to our service, even when we were a lot smaller than we are today," said Jeremy Loftin, EVP and Chief Operations Officer at Legacy Bank & Trust. "When our growth spurt started, we had to perform the due diligence of searching for technology that best matched the size we aspired to be. Once again, Jack Henry did not disappoint. Their robust and competitive solutions stood out in the market, and once implemented, the results came quickly. They've allowed us to automate processes, be more efficient, and scale.
Legacy Bank & Trust continues to explore new niche markets and potential acquisitions while growing organically. The bank is continuing its geographic expansion into
Stacey Zengel, senior vice president of Jack Henry and president of Bank Solutions, said, "Legacy Bank & Trust is a dynamic community bank with a unique business model. Their niche focus in recent years has not only helped thousands of customers in underserved communities but has also led to strong growth for the institution. We are grateful to have been by their side through this transformation and will continue to provide the right technology solutions for their evolving needs."
About Jack Henry & Associates, Inc.®
Jack Henry™ (Nasdaq: JKHY) is a well-rounded financial technology company that strengthens connections between financial institutions and the people and businesses they serve. We are an S&P 500 company that prioritizes openness, collaboration, and user centricity – offering banks and credit unions a vibrant ecosystem of internally developed modern capabilities as well as the ability to integrate with leading fintechs. For more than 47 years, Jack Henry has provided technology solutions to enable clients to innovate faster, strategically differentiate, and successfully compete while serving the evolving needs of their accountholders. We empower approximately 7,500 clients with people-inspired innovation, personal service, and insight-driven solutions that help reduce the barriers to financial health. Additional information is available at www.jackhenry.com.
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SOURCE Jack Henry & Associates, Inc.
FAQ
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