Four senior finance students – Chris Hresko, Jesse Kizewski, Eric Lamm and Sam Moore – represented the Rawls College and the Texas Tech School of Banking in the 2016 Community Bank Case Study Competition, hosted by the Conference of State Bank Supervisors (CSBS). Check out their video: https://www.youtube.com/watch?v=_Rj9s5Q-V10&index=4&list=PLKauCQgzK_ZRsnrokoXVTxuLT_Mv9Wccu

1. Conference of State Bank Supervisors
2016 Community Banking Case Study Competition
AimBank’s
Growth,
Financial
Management,
And
Community
Impact,
Through
its
Small
Business
Lending
Efforts
Texas
Tech
University
Students:
Jesse
Kizewski
Sam
Moore
Chris
Hresko
Eric
Lamm
Advised
by:
Dr.
Scott
Hein

2.
Executive Summary
AimBank, a Subchapter-S Corporation, considers itself foremost a small business lender
and has built a business model in support as evidenced by its decision to participate in the Small
Business Lending Fund. The bank provides resources and guidance to small business customers
so they can have the best opportunity to be successful. By lending conservatively, management
ensures that the bank remains protected against significant credit losses. Thorough analysis by
lenders before making a loan decision results in less non-performing assets on average than the
peer group.
When the bank was re-chartered in 2002, it initially grew exponentially, but growth has
slowed somewhat in recent years. The bank’s current efficiency ratio and profitability are
slightly better than the average of its peers. AimBank’s Employee Stock Ownership Plan is the
single largest shareholder of the bank, which contributes to management’s focus on relationship
banking and directly ties employee wealth to customer success.
Relationship banking is the driving force behind AimBank’s lending model.
AimBank’s personally-tailored assistance to their small business customers provides a
significant strategic advantage. By tailoring assistance directly to the customer, the likelihood
of success improves, which in turn, resonates throughout the community. To investigate the
effects of the relationship banking culture, three of AimBank’s small business customers were
interviewed by the team, with each providing their own unique insights into both the bank’s
management and its community impact. By creating close relationships with their small
business customers, AimBank has developed a shared vision with each of its various small
business borrowers, which allows the bank to creatively provide the best loan structure for the
borrowing customer. AimBank obviously cares about building strong relationships with its
customers and strives for success for the bank, its customers, and the community.

3.
Background
Lubbock is located in the northwestern part of Texas with the Permian Basin to the south
and the Texas Panhandle to the north. The Lubbock metropolitan area had an estimated 2015
population of 311,154 and is the 11th
largest city in the state of Texas. Nicknamed the “Hub
City”, Lubbock is an oasis in West Texas, home to over 25 community banks. The atmosphere
surrounding the community banking industry is highly competitive, as evidenced by only two of
the top six large banking institutions having a major presence in the city. Due to its thriving real
estate market and low cost of living, Lubbock has been recognized by CNNmoney as one of the
best places to launch a small business startup. The Lubbock economy is highly diversified. The
medical district holds two full-scale hospitals, and a countless number of specialist and private
practice entities. The agricultural industry in the region is a worldwide leader in cotton
production while also raising livestock and producing grain, wine and corn. In the middle of the
city lies Texas Tech University, a top research institution supported by a large college
population (including both a medical school, as well as a school of law) whose demand for
innovative products and services creates a culture in the community that allows entrepreneurial
businesses to thrive. This environment is home to AimBank, the community bank our team has
chosen to analyze for our case study.
AimBank was founded in Littlefield, Texas, a small town just 30 miles northwest of
Lubbock. The bank was re-chartered in 2002. Like most community banks born in West Texas,
AimBank got its start providing loans to the agricultural sector. We chose to study AimBank in
part because of its rapid growth, but especially due to its participation in the Small Business
Lending Fund. Currently, the bank holds $829 million in assets and employs close to 200
people. AimBank has become a rapidly growing, viable institution that openly seeks to develop
and foster small business lending with friendly employees.

4.
Jonathan Hill, AimBank’s Lubbock President, and Jeremy Ferrell, Chief Operations
Officer of AIM Bancshares Inc., the two key executives we visited with, were great sources of
valuable information regarding the bank’s culture, financial goals and strategies. During the
course of our study, Mr. Hill and Mr. Ferrell were amazingly transparent and forthcoming. Both
were quick to emphasize AimBank’s heavy focus on small business lending to accomplish its
overall goals, financial and non-financial in nature. Easily identifiable ties between the bank’s
success and its small business lending provide the essence of our evaluation. AimBank relies on
small business lending to grow. Management promotes small business lending to better both the
community it operates in, as well as to reward shareholders.
I. Growth through Small Business Lending
The Conference of State Bank Supervisors (CSBS) defines a small business loan as any
commercial loan issued in the amount of $1,000,000 or less. By this definition, 21% of AimBank’s
total net loans and leases are small business loans, based on the March 31, 2016 call report.
However, AimBank’s definition of a small business loan is more encompassing than the CSBS
definition. Mr. Ferrell maintains that upwards of 80% to 90% of AimBank’s net loans and leases
are issued to customers properly perceived as small businesses. Taking all information into
account, we have surmised that AimBank’s business model is built around small business lending,
which allows the bank to achieve significant financial growth.

5.
In Figure 1, both historical measures of total assets and net loans, derived from the
bank’s Uniform Bank Performance Report, are plotted, along with “best-fit” trend lines. The
equations for both trend lines are exponential. With both trend lines having an R-squared above
0.94, both are faithful representations of the actual data. We can safely say that the bank has seen
exponential growth until very recently.
*Data pulled from AimBank UBPR
Since its re-chartering in 2002, AimBank has grown from $13 million to $829 million in
total asset size. The year-over-year growth is somewhat sporadic, but is consistently positive for
the years leading up to the first quarter of 2016. However, this quarter is the first time in recent
history the bank has experienced a decrease in total asset size. It is impossible for any business
to grow exponentially in perpetuity, and in 2016, we are observing the growth beginning to
slow. That being said, historical growth is still good evidence of the success of AimBank’s
small business lending model. In fact, both Mr. Hill and Mr. Ferrell warned us of the decrease
in growth and identified the bearish oil and gas sector as one reason. Note though, that net loans
and leases increased in spite of the slight drop in asset size. This signals that asset quality
remained high even when under stress. This is a positive signal for the bank, although

6.
regulators might associate such high growth with reckless lending. Ultimately, because the
loss in total assets appear well anticipated and immaterial in size, we conclude such growth is
warranted and should not be a likely cause for concern to shareholders or managers.
*Data pulled from AimBank UBPR
Net income has grown more rapidly than assets over the fourteen years, but both
evidenced signs of slowing in the first quarter of 2016. Mr. Hill explained that most likely,
year-end 2016 income will closely resemble that of 2014 rather than 2015. Again, both
executives identified one cause of the slowdown being the recent bearish oil and gas industry.
Typically, community banks will derive most of their income through interest earned on
loans. Net interest income earned in relation to total average assets is typically higher for
community banks than for systemically important financial institutions (SIFIs). Consistent with
this idea, net interest margins for AimBank are 55% higher on average than margins for Bank of
America over the years since 2002.

7.
Larger banking institutions derive more of their income from fee income generated on
deposits and other sources. Since fee income is not represented in the net interest margin
calculation, margins for the institutions that do not rely on interest income will inherently be
lower. Net interest margin is the most accepted indicator of a bank’s dependency on interest
income and is the best way to identify the difference in business models between larger banking
institutions and community banks.
*Data pulled from AimBank and Bank of America UBPRs
To give the current financial performance of AimBank context, five similarly sized
community banks were pooled together for comparison using SNL Financial’s default selection
for peer banks. ROA and the efficiency ratio are the simplest and most encompassing ratios that
will offer insight on AimBank’s ability to generate profit and operate efficiently compared to its
peers.

8.
*Data pulled from SageWorks.com
In 2015, AimBank returned 1.31% on its assets, while the peer group average is a
1.19% return. The efficiency ratio examines a bank’s ability to manage its costs efficiently. It is
a widely used metric in the banking industry and provides insight on a bank’s cost structure.
AimBank’s efficiency ratio is lower than the average of its peers, consistent with the bank
performing relatively more efficiently. Even though AimBank is performing above-average in
these ratios, First National Bank of Central Texas is performing well above every other bank in
the sample and has set a standard of what community banking in Texas can be and suggests
further potential room for improvement.
All banks have a capital structure built to meet their individual desired operating and
profit goals, and AimBank is no different. Jonathan Hill explained that AimBank retains most
of its earnings generated from operations to increase the bank’s equity. AimBank is structured
as a Subchapter-S Corporation and is not taxed at the corporate level. Shareholders, on the
other hand, are held responsible for taxes on bank net income. AimBank pays out a 39%
dividend to cover this. This dividend policy allows AimBank to retain 61% of its earnings and
is a significant reason why AimBank has been able to grow at the pace it has since its re-
chartering and still remain well capitalized.
Institution
ROA
Efficiency
Ratio
Subchapter-­‐-­‐-­‐S
Status
AimBank
1.31%
65.80%
Yes
FNB
of
Central
Texas
1.81%
47.64%
Yes
Providence
Bank
0.48%
84.79%
Yes
Security
Bank
1.35%
69.95%
Yes
Centennial
Bank
1.53%
70.29%
Yes
FirstCapital
Bank
of
Texas
0.76%
62.79%
No
Averages
1.19%
67.09%
N/A

9.
If faced with an equity need, AimBank has the option to consult with shareholders on
issuing additional equity. AimBank’s capital adequacy can be easily assessed by its tier 1
leverage capital ratio. AimBank’s tier 1 leverage capital ratio is 8.62% as of December 31,
2015, which is well above the 4% regulatory standards. AimBank’s peers however have an
average tier 1 leverage capital ratio of 9.10% and therefore AimBank is not capitalized as well
as its peers. AimBank has been able to maintain levels of capital above the requirement, while
growing at its rapid pace. AimBank’s access to equity funding is a significant strength and has
allowed the bank to extend more loans to small businesses.
In 2010, the federal government created the Small Business Lending Fund (SBLF). The
purpose of this fund was to provide capital to well-qualified banks to promote job creation and
economic growth by lending to small businesses. In 2010, banks under $1 billion in assets were
able to accept an amount of capital up to 5% of their total risk weighted assets. After in-depth
consideration, AimBank took its maximum amount allowed of $9.1 million. The funds gave the
bank the ability to grow the loan portfolio by about 4.5% with loans dedicated to small
businesses. The SBLF funds were low-cost and provided larger returns compared to loans that
were enabled through more expensive sources of capital. However, no anomalies or spikes in
assets or income were observed in years 2011 and beyond. In terms of financial performance,
the SBLF did not affect the bank in any significant way noticeable in most bank metrics.
AimBank has grown assets and net income rapidly over its short life and has used small
business lending to do so. The net interest margin of AimBank is much higher than that of an
institution of a much larger scale, and the bank has been able to generate higher profits and
operate more efficiently than the average of its peers. While participation in the SBLF enabled

10.
the bank to issue more loans, it does not appear directly responsible for any dramatic change in
the bank’s course.
II. Management Promotes Small Business Lending
Not all banks competing in the Lubbock market want small business lending to be their
primary focus. For example, some of AimBank’s peers focus chiefly on large commercial real
estate lending. AimBank, on the other hand, takes the necessary steps in order to attract these
small business borrowers to provide loans and other financial services. Management strives to
promote a culture that encourages small business lending and aid small business customers,
while maintaining conservative lending policies in order to protect the bank. The decision by
AimBank to take the SBLF funds further represents management’s desire to be a primary
lender in Lubbock’s small business sector.
With the negative connotation of TARP funds fresh on everyone’s mind, AimBank
management was initially torn on whether or not to accept the funds, not wanting to risk being
wrongly categorized as an unhealthy bank. After careful consideration, management decided to
utilize the SBLF in September of 2011. The stipulation associated with these funds were that
participants were subject to paying a low-rate quarterly dividend to the U.S. Treasury. However,
after a period of 4.5 years, the dividend rate on these monies was set to increase. March of 2016
marked the end of this 4.5-year period for the bank, and while AimBank anticipated paying off
the SBLF before the trigger date, they have not done so, as of yet. Management made this
decision as a precaution due to the recent decline in oil and gas prices and the potential for
adverse consequences in related business lines. The bank is currently seeking funds to extinguish
the SBLF funding obligation in the next 60 to 90 days. In our view, rather than facing an
increased obligation, management should have had more repayment contingencies in place.

11.
A. Promoting a Small Business Lending Culture
AimBank has grown from 25 employees in 2006 to more than 200 employees today.
This employee growth was necessary to provide a superior service to clients and to make certain
clients’ businesses had the financial resources and guidance necessary for success. AimBank is
able to offer an extensive list of features to its client base including a service called “Business
Manager” that allows a small business to operate on a cash basis regardless of their customer’s
payment terms. Additionally, AimBank offers standard business services such as their AIMazing
checking account, credit card machines for businesses, and employee payroll. The bank
competes in the modern banking environment by staying up to date with the latest technological
features such as merchant capture, online banking, and an app for mobile devices. The modern
day bank customer has different cash demands than in the past, so AimBank has an agreement
with Stripes (a major gas station commercial chain across Texas and prominent in the Lubbock
area) allowing cash withdrawals from all Stripes ATM’s free of charge.
Mr. Hill described how excellent customer service is achieved. With AimBank business
cards containing bankers’ personal cell phone numbers, customers are encouraged to call any
time of the day. Every employee contact counts, and even tellers have business cards. This
subtle practice facilitates the idea that clients should have a relationship with every employee
they come across at the bank. AimBank’s management also believes in what is referred to as a
“trickle-down” effect. By serving one customer exceptionally, the chances of that individual
referring someone such as his or her accountant, lawyer or family friend back to AimBank will
be high.

12.
For quality control, AimBank has a loan committee meeting 4 out of 5 business days
every week. This is significantly higher than peer banks who hold loan committee meetings
once every two weeks or once a month. With this policy, AimBank is able to get back to its
potential customers much faster than the competition. Mr. Hill stated that the speed and
efficiency in which AimBank gets back to its customers plays an integral role in acquiring a
client's business.
B. Protecting the Bank While Lending
AimBank believes in conducting thorough due diligence before considering potential
loan customers. When applying for a small business loan, AimBank will subject the prospective
customer to a very extensive application process. Documents requested will include everything
from proof of hazard insurance to personal and business tax returns. Once the data has been
gathered, mined, and analyzed, management is prepared to make a well-educated decision to
approve or reject a loan request. Further, before the loan committee accepts any loan, committee
members ask each other to imagine it was their own money and to decide whether or not they, as
individual investors, would loan to the customer.
AimBank personal bankers regularly contact their clients to offer assistance when needed
and to make sure the business is operating smoothly. AimBank prefers for its small business
client to use a checking account with the bank. This allows AimBank to monitor the way funds
are allocated and to get a better idea of its clients’ spending habits. If a small business does need
additional funding, then AimBank prefers to pay the respective vendors directly. This is the
bank’s way of assuring the monies are used for the most useful purpose.
Generally, bank management likes to have at least two or three sources of repayment
available for the loan other than the primary method. Occasionally, a business may request a loan

13.
and the primary source of repayment will fail. In this case, the bank relies on its alternate
sources of repayment to cover their principal. These additional sources include anything from
auxiliary income the client may generate to the collateral behind the loan. AimBank believes
that this mindset is critical to the success of community banks over larger institutions. As a
community bank, AimBank is able to derive the multiple repayment sources quickly, where a
large institution will have a difficult time doing so. The decision maker in a community bank is
not far removed from the context of the loan, while larger institutions may have an entirely
different department in charge of troubled assets. By being directly involved in the repayment
process, the community banker is more easily able to work with the client.
The economy is not always predictable, but with proper management, a bank can be
prepared to handle most adverse situations accordingly. The management at AimBank has
developed a specific method which allows them to do this. For example, every Wednesday Mr.
Hill requests his Lubbock lending staff submit a report detailing any loan that is in excess of 10
days past due. The report must include detailed information about where the loan stands and
what is being done to recover payment. This same concept is seen all the way up to senior
management in the company. Every Friday, officers are asked to report their branch’s loans that,
by the end of the month, would be in excess of 30 days past due to CEO Scott Wade. This
system assures everyone is constantly being held accountable for their respective potential
problem loans at all times. This allows AimBank to recognize a struggling small business
quickly, assess the problems, and attempt to work with the client as much as possible.
AimBank has an executive committee and a model which determine the provision for
loan-loss account. This model estimates the potential for losses and the executive committee
makes a recommendation to the board for approval. The goal is to develop an Allowance for

14.
Loan and Lease Losses (ALLL) account that is substantial enough to protect the balance sheet
during asset devaluation. In past years, AimBank has grown rapidly, so management has
accounted for this increase in growth by increasing the ALLL account beyond what regulations
may deem adequate. Recently though, challenges in the oil and gas sector are likely to result in
greater losses than originally anticipated. In order to compensate for this decline in assets,
AimBank plans to increase its ALLL as a percentage of total loans during 2016. The board feels
this is the prudent thing to do.
AimBank is typically more conservative in its lending efforts than its peers. Since this
does translate to less risk and usually less loss, it could be argued that AimBank is missing out
on potential profits. Jeremy Ferrell responded to this by saying, “We are conservative
underwriters, which does lessen the pool of borrowers from which we can lend to. However, we
typically struggle to remain below an 80% loan to deposit ratio, which is our desired maximum.
In other words, we are able to reach our desired maximum level of loans with a conservative
philosophy. Therefore, we ‘leave nothing on the table’ that we don’t feel belongs there.”
AimBank is comfortable with its current amount of risk, and rather than increase risk in search of
profit, the bank prefers to remain financially sound and well capitalized.
AimBank also has an employee stock ownership plan (ESOP) that accounts for 20% of
the bank’s equity and represents the largest single shareholder. The ESOP exists so that
employees will be directly invested in the bank’s future and will be inherently driven towards
success. Management likes this tactic because they believe this encourages employees because
they have “skin in the game”. The benefit of this is two-fold. In order for the bank to succeed,
the customers must also succeed. This alignment of customer and banker goals is what causes
AimBank to sit “on the same side of the table” with its customers, as management says.

15.
Additionally, employees feel more connected to the bank, and in turn, are more loyal and feel
more inclined to bring in business.
III. Community and Shareholder Impact through Small Business Lending
This economic mantra is the driving force
behind AimBank’s small business lending efforts.
In West Texas, small businesses significantly
impact the economy and community in a very
positive way. Even though local community banks are the primary source of funds for small
businesses, the resulting relationships and partnerships stemming from taking out a loan become
very valuable. AimBank places great emphasis on its relationships with small business
customers because not only does it create success for AimBank, the close relationships with
customers give the small businesses the best opportunity possible to be successful. The more
successful AimBank is in helping the small businesses be, the greater the multiplier effect of the
“Small business is the engine of
our economy”
-Jonathan Hill

16.
impact AimBank can indirectly have on the economy through the successes of their small
business lending.
Although community banks are known for their relationship banking, it is embedded
within the culture of AimBank in particular. This deeply rooted belief in chasing opportunities to
create, maintain, and improve relationships with their small business customers has led to great
success for AimBank. The culture established by the large ESOP at AimBank creates a
partnership atmosphere between employees and their small business lending customers, in large
part because AimBank employees view themselves as small business owners as well.
Three small businesses were interviewed to get a more in-depth perspective of how the
small business lending of AimBank directly and indirectly impacts our community, as well as to
discover how AimBank’s customers view their business relationship with their bank.
AimBank is able to better serve their customers in a more individually tailored way based
upon the specific needs of each particular small business. For each small business that our team
interviewed, whether it was structuring the loans in the most beneficial and efficient way, getting
creative to get the deal done, or helping a small business as much as possible, each small
business customer had their own personal account of his or her individually tailored assistance
from AimBank. Although the direct impact AimBank is having through their customers is
significant, the indirect impact on the economy and community by the small businesses also has
a ripple effect that starts with the bank’s small business lending efforts, which ultimately comes
full circle back into the bank. Whether it be the partnership atmosphere of the real estate market
creating more jobs, the lifestyle impact resulting from a small business bringing an innovative
idea into our community, or the impact that is had through the ability to expand in order to better
provide for employees and children, the community impact of the funds loaned by AimBank has
a multiplier effect.

17.
A. Dan Williams-Real-Estate
Dan Williams, a real estate professional in Lubbock, Texas, is involved with residential
homes, commercial development, and the investment side of real estate on a larger scale. Mr.
Williams began both his real estate career and his relationship with AimBank in 2006, during
which time he sold 36 houses. He completed over
100 transactions last year involving buying
numerous properties, rehabilitation and rental
properties. The average in Lubbock for realtors is
10 transactions per year, and the national average
is 7. According to him, he has had an “awesome
experience [at AimBank] and got a deal done that
was not getting done otherwise.” For Mr.
Williams, being able to work with AimBank to structure a loan in a way that is most beneficial to
him is crucial. “It’s how the loan is structured, how I buy the deal, how fast I can close on the
deal. It’s really important. You get that at a community bank level.” He believes that any
successful small business person must have a good banking relationship. He realizes the impact
he is able to have on the community stems from this relationship with AimBank. “The more
money the bank helps me make, the better it is for me, for [AimBank], and for the community.
There’s a spread effect that is substantial.”
The real estate market plays an integral role in the growth and development of Lubbock.
There are certain population marks that need to be reached for larger businesses to start looking
to enter into a new market or open up a second store. Lubbock has a Metropolitan Statistical
Area population of 300,000, which is one of those major milestones that has led to massive
growth within our community. Lubbock is ranked 3rd
in job growth in the state of Texas behind
“Small businesses should all have
a banker; they should all have a
Jonathan. No way my business
would be where it is today without
the people that have been here.”
Dan Williams.

18.
Austin and Dallas, and this is largely attributable to people like Mr. Williams within the real
estate market. Good partnerships are crucial to the success of the real estate market, much like
AimBank’s culture of relationship banking. In any real estate transaction, numerous parties are
involved: appraisers, processors, lenders, inspectors, title companies, surveyors, moving
companies, sub-contractors, etc. Mr. Williams realizes that his success is important for not only
himself, his family, and AimBank, but also for the community as a whole, as illustrated by the
above list or other transacting agents. A chain reaction stems from his successes. If he can
include a local lender in a transaction, that lender will see loan growth. That lender can then
hire a new assistant, a new processor, and a new appraiser. Additional incomes in Lubbock
mean more money spent in the community.
With this many people involved within a single real estate transaction, it is easy to see
how much of an impact one successful person like Mr. Williams can have on the community that
covers a wide range of people. For example, when AimBank lends funds to him to purchase a
home to rent or sell, he knows what he needs to do to “make the nicest house I can make for that
property to turn it into something that is good for the community.” Whether it be paint, tile,
carpet, etc., other local businesses are getting all of that business. This creates a clear picture of
the ripple effect Mr. Williams is having on the community. He has his ‘go-to people’ he uses on
a consistent basis within the Lubbock community. He shares the contact information for his
‘carpet guy’ once a week at minimum, which creates substantial work for that carpet business.
The more business Mr. Williams can send to this carpet business, the more successful
they can be. From this success they are able to hire an additional sales person, an additional
carpet layer, an additional payroll person, etc. When more jobs are created within our
community, Mr. Williams is quickly on to build another house, and the cycle continues. Further,
he realizes “it all starts with that loan to make this business idea happen.” The economic impact
he is able to have on the community, that all started with a loan from AimBank, is both

19.
significant and endless. AimBank understands that the more help they are able to provide to Mr.
Williams, so he can be successful, plays a significant role in that process.
B. Emily Phillips-Host and Toast
Emily Phillips was the former owner and operator of Host & Toast, a boutique wine store
in Lubbock that opened in 2011. She began doing business with AimBank in 2013. She wanted
to do something different for the Lubbock community by opening up this innovative store, where
a similar business would only be found in larger cities. She wanted to provide a sophisticated
entertainment option for Lubbock that would improve the overall culture and lifestyle within our
community. After its establishment, Host & Toast
soon encountered many operational difficulties,
and AimBank tried to help her by hosting events at
her store as well as extensively discussing her
financial statements. Although Host & Toast is no
longer in business, the close relationship created
with AimBank allowed for a smooth transition for
Mrs. Phillips.
Mrs. Phillips found it very difficult to sell the idea of doing something as innovative as
Host & Toast was to Lubbock, but community banks are able to offer help to small businesses
because they are invested in the community as well. AimBank understood her vision for the
business, even though it was such a new concept for the Lubbock market. Mr. Hill had some
thoughts regarding AimBank’s relationship with Mrs. Phillips. “One thing we have been able to
accomplish at the bank is speed and efficiency. Emily can’t have indecisiveness from me.
“For small business, you need to
be able to move quickly and be
innovative. It’s great having
relationships with people in
community banks who share
your vision.”
- Emily Phillips

20.
Having a system behind me and understanding that system to be able to work to the advantage of
my customers is a strategic advantage we have.” Early on in Mrs. Phillips’ business venture,
managing cash flows was a crucial part due to tight margins. She bought a majority of her wine
inventory on accounts payable, but the Texas Alcoholic Beverage Commission (TABC) states
accounts payable may not be outstanding in excess of 15 days. So, if she were to have two weeks
of slow cash inflow, there was the possibility of having an invoice that she would not be able to
pay. If she was not able to pay the TABC-Regulated distributor’s invoice on the due date, she
would be unable to purchase further inventory until payables were reconciled. She knew that she
was at risk of not being able to pay the invoice, so she was in contact with Mr. Hill to keep
AimBank informed of the situation and to discuss gaining additional funding. Mrs. Phillips was
prepared to take on this new short-term liability because she knew she “would be much worse
off if the check bounced.” Community banks, such as AimBank, offer this open communication
channel that is helpful when things are going well, but especially crucial when times are tight for
small businesses. From Mrs. Phillips’ point of view, “It is nice to have a person you can speak
with, and more importantly, the same person all the time” that knows who you are and
understands your business and current situation.
Not only does AimBank provide significant economic impact in the community through
their small business lending, they are helping to provide culture and lifestyle impacts within the
community through small businesses like Host & Toast. Emily Phillips understood that having a
wine store in Lubbock improves the culture and the lifestyle. One of the innovative ideas she had
for her business was “Yogamosa.” Yogamosa involved a yoga class in the morning followed by
brunch and mimosas. People who saw ads online came from out of town numerous times and
thought it would be fun. She noted, “It’s fun ideas like this, in Lubbock, that people will
remember.” A wide consumer knowledge of fine wines is something that is usually only found

21.
within larger cities. She wanted to create a place for people to become more educated about wine
and to have a nice place to go with friends.
The impact AimBank is having on the community through their small business lending is
more observable when all of their small businesses are being successful, but, as in this case, how
does AimBank respond when their small business customer begins to struggle? Host & Toast was
providing a significant impact on the culture and
lifestyle within the Lubbock community, but several
issues were encountered in a short time frame that
made things difficult for Mrs. Phillips. “Bad luck
things happened maintenance wise, summer in
Lubbock always slows down, and alcohol sales in
general were down last year.” Early during the
summer last year, she went and visited with Mr. Hill
and let him know that things were not going well,
and they were not selling enough. She asked him if
AimBank could host some events at her store and
invite other bank clients in her target market to help get them into her store. AimBank was
eager to assist. “They would host events for realtors in my store to help me get the word out.
It was very meaningful to me.” This type of relationship is only found at the community bank
level.
Although Host & Toast has closed its doors and is no longer in business, the open
communication resulted in a smooth transition for both parties. Because AimBank has
multiple sources of repayment from Mrs. Phillips, the loan for Host & Toast has never been
past due and is still in good standing. Because of her relationship with AimBank, she was
Jonathan Hill

22.
able to avoid the foreclosure that was likely to occur had she been a customer of a larger
institution. From AimBank’s perspective, Mr. Hill was proud of Mrs. Phillips’ candor and
honesty about her business. “We can’t do anything about something if we aren’t made aware
of the situation, and because of the relationship we had with Emily and her willingness to
come in and talk, we were able to try to help. We do events and we try to help our customers
be successful, that’s being good bankers.”
C. Stace Jones-Christian Preschool Centers
Two brothers, Stace Jones, Chief Operating Officer, and Brooks Jones, Corporate Office
Director, are the faces of Christian Preschool Centers (CPC), a chain of early child care
education centers, which was started by their parents over 50 years ago and has grown to 8
separate locations in Lubbock. Christian Preschool
Centers began doing business with AimBank in 2013
when their company was at a “pivotal state,” as they
had to decide if they were going to provide health
insurance for their 225 employees. They were referred to AimBank by the current owner of one
of the buildings they were trying to purchase. Mr. Hill worked closely with Christian Preschool
Centers. Stace Jones was extremely impressed with his experience at AimBank saying that they
“went the extra mile, took the extra time, and got creative with it.”
Other avenues through which AimBank’s small business lending is having an impact on
the community is found through Christian Preschool Centers (CPC). The level of education is
important to parents that are looking to move into a community, and CPC is providing a superior
level of education to children. CPC believes that “if you teach a child to read and write, teach
them self-esteem, show them they are loved, special, and intelligent, then they can take that and
be able to learn and develop themselves.” When AimBank first started doing business with Stace
“Can’t change the world except
for one child at a time.”
- Stace Jones

23.
and Brooks Jones, their family business was in the process of trying to purchase two new
locations while trying to decide if they were going to provide health insurance for their
employees. “Because of being able to acquire both of those schools, the net income of both pays
the health insurance bill. If AimBank would not have done what they did, we would not have
been able to provide health care and would have had to downsize, but now we can continue to
grow.” CPC places an emphasis on growth and expansion so it can provide the same high level
of quality childcare and education from the lowest to the highest income families, while also
being able to better provide for their employees. Being able to provide for their employees
allows them to have more qualified teachers, lower employee turnover, and lower training costs.
CPC was able to increase rates for their employees across the board by $3.50 an hour. This pay
increase allows their employees to no longer have to get a second job to provide for their
families. “We want to put money back into the people that are helping us teach these children.”
Christian Preschool Centers is impacting the community in this one very observable way
through their 225 employees.
CPC recognizes the impact it has, and parents place a lot of trust in CPC to be a good
influence. CPC encourages parents to become more engaged in their children. The ability for
parents to come into a CPC and receive counseling regarding their children or even their own
marriage creates a positive impact at home. Although this is less observable than some of the
other impacts AimBank is having on the community through their small business lending efforts,
it is still an important aspect that affects the community as a whole in a very positive way.

24.
IV. Conclusion
AimBank considers itself foremost a small business lender and has built a business model
in support of this mindset. The model is responsible for the bank’s historic growth and its current
strong financial performance level. Current bank operating efficiency and profitability for
AimBank are slightly better than the average of its peers. The participation in the small business
lending fund signifies AimBank’s commitment to small businesses. This coincides with the
culture the bank has established, which fosters small business success.
AimBank’s Employee Stock Ownership Plan is the single largest shareholder of the bank,
which contributes to management’s focus on relationship banking. This focus is the driving force
behind AimBank’s lending model and directly ties employee wealth to customer success.
Dan Williams has been able to purchase and sell at his own rapid pace, and AimBank
developed an individualized process for him to be able to continue his success. Although
Host & Toast is no longer in business, AimBank’s conservative approach with multiple
sources of repayment protected the bank from any losses, and Emily was able to not only
make a valiant attempt to create a new small business but also to make a smooth transition
toward shuttering the establishment. AimBank provided a creative loan structure which
enabled Christian Preschool Centers to continue their passion for growth in order to better
provide for their children and employees.
AimBank strives to create the best opportunity possible for both their customers and
their employees to be successful.
By driving its small business customers to be successful, a
ripple effect is created that all begins with the funds loaned by AimBank to its customers and
resonates through the community.

25.
V. Acknowledgements
Our team would like to extend our gratitude to the following individuals for their
contributions to the completion of our report.
-Mr. Jonathan Hill
-Mr. Jeremy Ferrell
-Mrs. Ashley Ritchey
-Dr. Scott Hein
-Mr. Stace Jones
-Mr. Dan Williams
-Mrs. Emily Phillips
-Mrs. Nikki Kantelis
-Dr. Mark Moore
-Dr. Laura Cardella
-Dr. Eric Cardella
-AimBank Staff
Also, we would like to thank the Texas Tech School of Banking for supporting students
in extra-curricular pursuits.

26.
VI. Sources/Works Cited
Jonathan Hill - Mr. Hill was our primary information provider. We met with him on a
regular basis throughout the project. He provided us with insight to the inner workings of
management at AimBank as well as clarification when needed. He also served as the
intermediary between the selected businesses and the team.
Jeremy Ferrell - Mr. Ferrell met with the team, as well as offered telephone and email
communication, when required. The information was primarily from the holding company level.
Dan Williams - Told us about his experiences with AimBank as a real estate borrower
and provided insights on the inner-workings of his banking relationship.
Emily Phillips - Was the owner and operator of Host & Toast and provided information
regarding how AimBank handled a customer with a struggling small business.
Stace and Brooks Jones - They provided us with information about their business as well
as giving us an inside look into some of their facilities, as well as discussing their relationship
with AimBank.
AimBank. Web. 2 May 2016. <https://www.aimbankonline.com>.
"Data." Sageworks Bank Information. Web. 02 May 2016. <https://bankinfo.sageworks.com/>.
"FFIEC Home Page." FFIEC Home Page. Web. 02 May 2016. <https://www.ffiec.gov/>.
Koch, Timothy W. Community Banking: From Crisis to Prosperity. Irmo, SC: Makawk , a
Division of TWK Strategies, 2014. Print.
"LEDA – LUBBOCK ECONOMIC DEVELOPMENT ALLIANCE." LEDA. Web. 02 May
2016. <http://lubbockeda.org/>