A banker who makes house calls

Broughton (left) learns about Ted Thomas's garage business.

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BIRMINGHAM, ALA. (FORTUNE Small Business) -- As an entrepreneur, Tom Broughton finds most banks pretty annoying.

He thinks they require too much paperwork from customers. And they take too long to make a decision on a loan. He thinks it curious that banks shovel money at customers when they don't need it - and slam the vault shut when they do. He doesn't get why bankers don't spend more time on their customers' turf when they profess to be so concerned about the state of their businesses.

"Probably don't want to scuff the wingtips," he chuckles.

All of which is pretty funny, considering that Broughton is a banker. He sees his startup, ServisFirst, as the antibank, a boutique outfit run by entrepreneurs for entrepreneurs. At his Birmingham, Ala., company there are no tellers. No ATMs. No advertising. No teaser-rate CDs. No fancy offices. No lollipops in the lobby. In fact, dear customer, these bankers don't even want to see you in the lobby. Stay in your shop. ServisFirst will come to you.

Since its launch, ServisFirst has maintained a laser focus on its ideal customer: busy small-business owners who want fast, personal service and are willing to pay for it.

So far, that's been a winning formula for Broughton. ServisFirst has become one of the top ten fastest-growing banks in the U.S., according to a study by Donnelly Penman & Partners, an investment bank in Grosse Pointe, Mich. ServisFirst posted assets of $850 million as of the end of 2007, up from $35 million when it opened its doors in May 2005. Last year it earned net profits of $5.6 million on revenue of $51.4 million.

Compared with the banking giants of the South - Wachovia (WB, Fortune 500), with $754 billion in assets, and Regions Financial (RF, Fortune 500), with $141 billion - ServisFirst is still a runt, but it is nipping competitors' flanks. Among other things, ServisFirst is wooing away top bankers from its rivals - and those bankers are taking some of their customers with them. Regions recently sued ServisFirst to try to bar it from hiring a top Regions banker, but dropped the lawsuit a few weeks after he joined ServisFirst.

"Flattering," says Broughton, 53. "We must be making them nervous."

That's probably understandable. This is his second bank venture. His first, launched with a cousin in 1985, was First Commercial Bancshares, which the two sold for $125 million in 1992. (He remained with the acquiring bank until 2004.)

Of course, Broughton's ServisFirst isn't alone in courting small business. Silicon Valley Bank (SVB) of Santa Clara, Calif., for example, specializes in providing loans to startups, often along with venture capitalists, and now has 15 offices across the U.S.

Even some large banks and charge-card companies are expanding their services to small business, offering larger unsecured lines of credit and quicker answers on small loans. One of the biggest banks in Alabama, Regions (RF, Fortune 500), disagrees with Broughton's suggestion that small business is overlooked. Tim Deighton, a spokesman for Regions, says his bank was ranked third in the nation by the SBA's Office of Advocacy for its service to small business.

"Our credit decisions are made locally," he says, "and we offer a package of services that is competitive."

Amid intense competition and shrinking profit margins in the industry, more banks see small business as an untapped market.

NEXT: Banking: It's about the relationship

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