Running a bank with less than $250 million of assets and just four branches, executives at West Town Bancorp in North Riverside, Ill., figured they needed to go beyond conventional community banking to produce a meaningful return.

For small banks, it's all about how they decide to compete, said A. Riddick Skinner, West Town's senior vice president for government-guaranteed lending. "We can't go out on the corner and offer everyone a cooler for opening a checking account. …You have to come up with a different business model."

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