At home with HOA banking

Academy Bank COO Tom Kientz notes that the community bank was eager to expand its deposit and loan services. “One of the very quick things we turned to were HOAs,” he says. Photo by Jason Tracy

Looking for an avenue to increase its deposit base, Academy Bank tapped into a market it hadn’t explored before: homeowners associations. Today, the community bank has successful relationships with HOAs across the country.

By William Atkinson

Academy Bank

$2.3 billion

Kansas City, Mo.

Academy Bank in Kansas City, Mo., is a full-service commercial bank with 80 branch locations in Arizona, Colorado, Kansas and Missouri. It provides a wide range of financial solutions for business and individuals, including commercial and business banking, treasury management, and mortgage services. The $2.3 billion-asset community bank is a wholly owned subsidiary of Dickinson Financial Corporation, a $3.5 billion-asset holding company also headquartered in Kansas City.

In 2017, Academy Bank was searching for additional product lines that would help it to grow its deposits. “We were looking at ways to increase our deposit base and impact the communities we serve,” says Tom Kientz, chief operating officer. “One of the very quick things we turned to were HOAs … and we quickly learned we could earn more of their business if we had a lending solution. We found that if we found a niche or product line to serve their lending needs, we could fulfill their relationships.”

Academy Bank entered this new market by creating HOA-specific products on both the loan and deposit sides, and then began marketing its services.

Initially, the community bank tasked a handful of bankers with the HOA business.

“Other people connected to it—HOA attorneys, accountants—said, ‘If you could solve the lending side of it, you could get the relationship,’” Keintz says. “Pretty quickly, we had success out of the gate, and we said, ‘Hey, let’s connect people so we could make the job easier.’”

Today, Academy Bank offers a full suite of HOA products (see sidebar, page 74). They include everything from low-cost HOA checking and high-earning money market accounts to treasury management products. According to Kientz, if an HOA has an FDIC-insured bank account of more than $250,000, it often takes multiple banks to manage the funds—but Academy Bank can handle accounts of that size on its own.

Solving pain points

Academy Bank’s foray into HOA banking fully involves a renewed focus on service. For example, the community bank’s marketing material highlights its commitment to attend annual HOA meetings and notes that the bank’s representatives are happy to visit HOAs in their communities.

“We will do that if we are invited,” says Kientz. “The biggest pain point the bank and HOAs saw was every year or every two years, an HOA board turns over completely. In order for them to conduct their banking, they have to go to the bank, fill out new paperwork and go to the individual owners—or ask all five new board members—to go to the bank.” Academy Bank suggested that it sends one of its banking representatives to the board meeting and take care of the paperwork then and there.

HOAs appreciate the personalized and detailed service, and moving into the HOA banking market has been good for Academy Bank in general. It has grown a healthy deposit base and firmly established a solid brand presence in the HOA-run neighborhoods it serves.

What does the future hold for Academy Bank as it relates to serving HOAs?

“I think the biggest opportunity we see now is making it easier for homeowners to make their [HOA] payments,” Kientz says. “We offer the traditional process through ACH, but we need to explore how to allow those HOAs—whether it’s PayPal, Venmo, Cash App, any of the P2P services—how to make them easier on the HOA boards themselves, so they’re not collectors. We have not perfected that yet, but that is something we’re willing to do.

“There are a lot of opportunities we can sell,” concludes Kientz. “We take them as they manifest.”

All in on HOA banking

Academy Bank’s homeowners association offerings are comprehensive, including:

  • Low-cost HOA checking accounts
  • HOA high-earning money markets, which maximize HOAs’ interest potential
  • Two bank charters (which doubles FDIC coverage)
  • Collateralized deposits (which feature deposit insurance beyond FDIC limits)
  • HOA loans (for things like repairs, major renovations, and other cash flow needs)
  • ACH origination (which speeds up collection processes for HOAs by allowing residents to pay annual or monthly dues electronically)
  • Bill pay (allowing HOAs to efficiently pay their vendors through Academy Bank’s online bill paying service)
  • HOA lockboxes (which eliminates the need for HOAs to handle checks that members send in for dues)

William Atkinson is a writer in Illinois.

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