Paducah Bank Revenue and Competitors

Another first Paducah Bank takes pride in is the fact that we were the first bank in Paducah to elect female Board members - Frances Hougland and Dolly McNutt were elected in January 1976. In mid-1984, a newly formed Holding Company, Paducah Bank Shares, Inc., purchased controlling interest in the Bank. A tremendous milestone was reached when Paducah Bank exceeded $100 million in assets in 1987. In 1991, the Holding Company Board of Directors had the foresight to create a stock plan to give the loyal Paducah Bank employees more than just a place to work. It provided an ownership position in our Bank and an excellent retirement benefit. The Bank's 401(k) and Employee Stock Ownership Plan (KSOP) has continued to grow and today is one of the larger shareholders. In 1995, the Bank installed a state-of-the-art, full-service ATM network at nine locations around McCracken County. Paducah Bank converted its entire database to an in-house system in 1996, thereby creating new technological efficiencies and allowing us to position ourselves for even greater growth. The following year Paducah Bank made its first-ever acquisition of another financial institution. The McCracken County assets of Republic Bank and Trust were purchased in November 1997. This purchase allowed us to move our Lone Oak Banking Center to a newer, more accessible location at 2635 Lone Oak Road and reinstate Saturday hours at that location. At the end of 1997, two of the largest banks in Paducah announced that they were selling to even larger, out-of-state banks; neither sold until 1998. As the only locally-owned financial institution remaining in Paducah, Paducah Bank enriched its product offerings and further developed an attitude of total commitment to our customers. The development of a sales culture was begun, and new directions were taken to reemphasize our commitment to our community. The beginning of 1999 saw the advent of Internet banking at Paducah Bank as well as a refining of our marketing and sales approach. Management began to work diligently to position the Company for a Subchapter S election, which was finalized in December 2001. Under the tax code the election allowed the Company to make distributions to its shareholders on a much more favorable tax basis than the former Subchapter C Corporation. The ability to make distributions to shareholders on a tax-favorable basis is attractive to investors, thus encouraging them to retain their investment in the Company, which is a key to the Bank's strategic goal of remaining an independent, locally-owned Bank. The Bank's ESOP receives substantial quarterly distributions since it is a substantial shareholder. As do all companies, Paducah Bank faced the constant challenge of attracting and retaining core customer relationships as well as great employees. Management determined that a new service strategy should be implemented and decided to learn from the best-The Ritz Carlton. CEO Joe Framptom, President Wally Bateman, Director of Marketing Susan Guess, and Director of Human Resources Maurie McGarvey enrolled in The Ritz Carlton Leadership Training program and brought back what they learned. The team felt it was imperative to engage the employees in the process of incorporating The Ritz Carlton information and creating their own service vision. As owners, we initiated a new customer service culture in 2002-our Owners' Commitment. Employees participated in the creation of our 15 Basics designed to put our service behaviors, credo, motto, and vision (to be the premier provider of financial resources) in place. In order to permanently cement this new culture into the organization, "Owners' Meetings" were created. Every day at 8:30 a.m., every employee at every location attends a five-minute stand-up meeting, including Saturday. Many residents in our community, banking elsewhere, recognized the higher service level and became eager to move their financial relationship from their existing provider. With the Bank's growing market share, a site in the Strawberry Hill commercial development was purchased in January 2002 for possible development of a financial center. During 2002 the management team began an initiative to take the Bank from "good to great." This concept, as outlined in the book Good to Great by Jim Collins, is consistent with the Bank's Owners' Commitment. All employees received a book, and were broken up into discussion groups to talk about the book and how it applies to our culture. Every new employee receives a copy and participates in a reading/discussion group. A Good-to-Great Council was formed in November 2003, and immediately put the flywheel in motion to develop and create the Bank's Core Values. The Bank's Core Values- People, Moral Soundness, Culture, Independently Owned, and Community Involvement -were presented to the Board of Directors on October 14, 2004. In 2005, the Good-to-Great Council was charged with the development of the Bank's Hedgehog Concept. The process involved meetings with all employees to determine their concept of the three circles described in Good to Great: what can we be the best in the world at, what are we passionate about, and what drives our economic engine. The Hedgehog Concept is a result of the ideas, insights, and understanding in the Bank. The Hedgehog Concept- Attract, Develop, Retain - was presented to the Board of Directors on December 8, 2005. A tremendous milestone was reached when Paducah Bank exceeded $400 million in assets as of September 30, 2005 -$402,643,385. Not only were our assets growing, but our staff was growing in order to provide our customers with premier financial service. Expansion plan discussions continued in internal meetings and board meetings, and in March 2006, the Bank purchased 1.5 acres in Hannan Plaza for the development of a new banking center.