ICBA Community Banker of the Year: The 2017 winners

“We were [one of the first] out in the marketplace, promoting the bank through television commercials.”
—Joe Fazio,
Commerce State bank

Joe Fazio’s sales-driven approach, entrepreneurial drive and community spirit has led 12-year-old Commerce State Bank to more than half a billion dollars in assets.

By Karen Epper Hoffman

Joseph Fazio III will be the first to tell you that he doesn’t have the “typical” bank CEO background. He did not start his career as a teller or a loan analyst. But ICBA’s 2017 National Community Banker of the Year has managed to take the road less traveled in building a community bank worth noticing.

It has been more than 12 years since Fazio and his cofounders launched Commerce State Bank in West Bend, Wis., building it up to $560 million in assets. But the former serial entrepreneur and stalwart salesman—who put in a dozen years at IBM and spent time at Northwestern Mutual, Marshall & Ilsley Corp. and financial technology provider Metavante Technologies, Inc.—started by dipping a toe in the water of community banking, investing in a “small community bank in Wisconsin with a friend of mine.”

When that experience ended abruptly but profitably, Fazio engaged in a couple of other startup efforts before being asked to help cofound Commerce State Bank due to his management, leadership and entrepreneurial experience. “Large companies didn’t interest me as much,” Fazio says. “I wanted to have that experience again of leading a small community bank. Once you get a taste of community banking, you like it.”

The three musketeers—
Joe Fazio (center) at Commerce State Bank’s West Bend branch office with the men who cofounded the bank with him: Dave Borchardt (l), chief financial officer and chief operations officer, and Tom Hopp (r), president. Below: Fazio was a member of the Wisconsin Bankers Association board of directors from 2013 to 2018.

With Fazio as CEO and chairman, Commerce State Bank has a distinctly commercial focus and sales-focused culture, which has shaped its presence in the market. Commerce State Bank was one of the first community banks of its size “out in the marketplace, promoting the bank through television commercials,” says Fazio. “Many other community banks were just not as focused on growth.”
In addition, Fazio says his bank has been “very opportunistic” in playing to the small to midsized businesses in the communities it serves—offering a rapid response to loan requests, in particular. “We’ll give you a fast answer,” says Fazio. “We know that a fast ‘no’ is better than a slow ‘maybe.’” Taking it a step further, Commerce State Bank acts as advisor as well as banker to its business customers, helping them decide whether to hire another salesperson or referring them to marketing or legal experts. It also runs networking seminars for its customers and prospects.

“From our first meeting, Joe radiated integrity and commitment. We knew we had to do our best for him.”
—Jack Henke, president/creative director of Henke & Associates

Fazio focuses on financial literacy efforts in the community and has authored a book, This Might Be a Dumb Question But … How Does Money Work?, to help people understand the basics of money and investing. “You don’t need to understand the exotic stuff to get rich slowly,” Fazio says. “I wanted to explain things simply, without getting too complex.”

His co-author, Jack Henke of marketing firm Henke & Associates, recalls the first time he met Fazio. “He was introduced to our team as a potential candidate for the local Common Council,” Henke says. “You hear a lot of people who complain about the way things are, but they are unwilling to make the commitment and act. Right from our first meeting, Joe radiated integrity and commitment. We knew we had to do our best for him. He won the election and was a positive, thoughtful and active council member.”
Fazio also tries to reach out to the next generation, underscoring the potential this career has to make a difference.

“The reason young people are not interested in being community bankers is a lack of knowledge and familiarity with it,” Fazio says. “It’s not Wall Street or the technology industry. It doesn’t sound cool.

“But millennials do want to make a difference. They do want to be a positive [force], and make the world better. And they don’t realize that you can do that in community banking.”

Joe Fazio
CEO, chairman and cofounder, Commerce State Bank
Location: West Bend, Wis.
Asset size: $560 million
Founded: 2005
Website: commercestatebank.com



Karen Epper Hoffman
is a writer in Washington state.

Community caretaker

Ledyard National Bank CEO Kathy Underwood takes the community banking mantra “making a difference” to heart.

By Elizabeth Judd

Kathy Underwood
President and CEO, Ledyard National Bank
Location: Hanover, N.H.
Asset size: $500 million
Founded: 1991
Website: ledyardbank.com

In mid-September, Kathy Underwood, president and CEO of $500 million-asset Ledyard National Bank, spent three hours of a Friday working side by side with nine coworkers, packaging macaroni and cheese for the local food bank. Underwood describes the project as “such fun” and enjoys being a go-to person for local nonprofits that need extra help.

Underwood says that 12 years ago, when she was recruited to be CEO of Hanover, N.H.-based Ledyard, she immediately felt like she’d “died and gone to heaven.” Having spent 25 years at a community bank that was acquired many times and ultimately evolved into a super-regional entity—ultimately KeyBank—Underwood relishes “the ability to not only know what a community needs but to be in a position to respond to those needs.”

Civic engagement is central to Underwood’s own personal mission, one she revisits each morning when she sees the Margaret Mead quote taped to her computer monitor: “Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has.”

Underwood has not only mastered the intricacies of community banking but has also been an advocate and advisor to regulators and associations. She served as a community bank advisory board member for the Consumer Financial Protection Bureau (CFPB) and as chair of the audit committee at the Federal Reserve Bank of Boston, and she serves on the board of directors for ICBA, among other boards. “It’s critically important that bankers speak up and contact rulemakers, whether it’s the CFPB or others,” Underwood says. “The more voices they hear, and the more real-life experiences we’re able to share about how some of these regulation changes are hurting our service to communities, the better.”

As an example, Underwood recently addressed the impact that the CFPB’s proposal to regulate consumer loans would have by reducing the market for small-dollar loans. She told the story of how her bank granted a man in her market a $500 loan to buy a lawnmower, preserving his business. Had the recently introduced consumer loan regulations been enacted without its current exceptions for small-dollar lending, a community bank would have to deny such a loan “and the gentleman would [go] out of business,” she says. “Those aren’t loans we make every day, but we are there when someone is in a pinch.”

Underwood advises all young people entering banking to serve on a local nonprofit board just as she did in her 20s. A few years ago, she gathered her senior leadership team together and explained that money donations to nonprofits had dried up and that these groups needed the support of Ledyard National Bank and its employees.
She identified her own passion more than 30 years ago when she began working with the American Heart Association on its advocacy and awareness campaigns. Shortly after she began volunteering, her husband was diagnosed with heart disease. “I’ve never left the Heart Association, because I saw firsthand how money raised for research made an impact on my family,” she says.
Six years ago, she launched a Go Red for Women campaign in New Hampshire to spread awareness that heart disease is the number-one killer of both men and women, yet 80 percent of heart disease can be eliminated by lifestyle changes. She is currently working on the fifth Go Red for Women event in her area.

For Underwood, it’s all about making an impact, whether it’s as a community bank CEO or as a charity volunteer. “Walking down the street and having people come up to you and share stories about how our bank has helped their families or their nonprofits or small businesses is so rewarding,” Underwood says. “The biggest change from being a CEO at a community bank versus at a larger bank is the ability to make a difference.”

In mid-September, Kathy Underwood, president and CEO of $500 million-asset Ledyard National Bank, spent three hours of a Friday working side by side with nine coworkers, packaging macaroni and cheese for the local food bank. Underwood describes the project as “such fun” and enjoys being a go-to person for local nonprofits that need extra help.
Underwood says that 12 years ago, when she was recruited to be CEO of Hanover, N.H.-based Ledyard, she immediately felt like she’d “died and gone to heaven.” Having spent 25 years at a community bank that was acquired many times and ultimately evolved into a super-regional entity—ultimately KeyBank—Underwood relishes “the ability to not only know what a community needs but to be in a position to respond to those needs.”

Civic engagement is central to Underwood’s own personal mission, one she revisits each morning when she sees the Margaret Mead quote taped to her computer monitor: “Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has.”

Underwood has not only mastered the intricacies of community banking but has also been an advocate and advisor to regulators and associations. She served as a community bank advisory board member for the Consumer Financial Protection Bureau (CFPB) and as chair of the audit committee at the Federal Reserve Bank of Boston, and she serves on the board of directors for ICBA, among other boards. “It’s critically important that bankers speak up and contact rulemakers, whether it’s the CFPB or others,” Underwood says. “The more voices they hear, and the more real-life experiences we’re able to share about how some of these regulation changes are hurting our service to communities, the better.”

From the heart—Left: Kathy Underwood lobbies on Capitol Hill on behalf of the American Heart Association. Above: Underwood, second from right, stands with members of Ledyard National Bank’s Wellness Committee after receiving the American Heart Association’s 2015 Gold Achievement as a Fit-Friendly Worksite.

As an example, Underwood recently addressed the impact that the CFPB’s proposal to regulate consumer loans would have by reducing the market for small-dollar loans. She told the story of how her bank granted a man in her market a $500 loan to buy a lawnmower, preserving his business. Had the recently introduced consumer loan regulations been enacted without its current exceptions for small-dollar lending, a community bank would have to deny such a loan “and the gentleman would [go] out of business,” she says. “Those aren’t loans we make every day, but we are there when someone is in a pinch.”

Underwood advises all young people entering banking to serve on a local nonprofit board just as she did in her 20s. A few years ago, she gathered her senior leadership team together and explained that money donations to nonprofits had dried up and that these groups needed the support of Ledyard National Bank and its employees.

She identified her own passion more than 30 years ago when she began working with the American Heart Association on its advocacy and awareness campaigns. Shortly after she began volunteering, her husband was diagnosed with heart disease. “I’ve never left the Heart Association, because I saw firsthand how money raised for research made an impact on my family,” she says.
Six years ago, she launched a Go Red for Women campaign in New Hampshire to spread awareness that heart disease is the number-one killer of both men and women, yet 80 percent of heart disease can be eliminated by lifestyle changes. She is currently working on the fifth Go Red for Women event in her area.

For Underwood, it’s all about making an impact, whether it’s as a community bank CEO or as a charity volunteer. “Walking down the street and having people come up to you and share stories about how our bank has helped their families or their nonprofits or small businesses is so rewarding,” Underwood says. “The biggest change from being a CEO at a community bank versus at a larger bank is the ability to make a difference.”


Elizabeth Judd is a freelance writer in Maryland.

“In general, I try to focus on the people versus the bottom line. Building [our bank] has been about investing in our people, growing those people and trying to get them to their highest levels.”
—Peter Nelson, Glenwood State Bank

At your service

Glenwood State Bank president Peter Nelson lives and breathes the golden rule to the benefit of employees, customers and the bottom line.

By Karen Epper Hoffman

Peter Nelson
President, Glenwood State Bank
Location: Glenwood, Minn.
Asset size: $272 million
Founded: 1899
Website: glenwoodstate.com

Most community bankers define the difference between their institutions and larger competitors in terms of customer service—usually the service that frontline employees provide to customers.
But for Peter Nelson, president of Glenwood State Bank of Glenwood, Minn., service is not simply about extra hand-holding from branch staff. He believes that the strength of his community bank and his skill as a leader lies in how he serves not just his customers but his employees. “In general, I try to focus on the people versus the bottom line,” Nelson says. “Building [our bank] has been about investing in our people, growing those people and trying to get them to their highest levels.”

Nelson’s sharp focus on his people is likely the very reason that the $272 million-asset bank has more than tripled its assets since he assumed leadership almost 12 years ago, nine years and a few months after he joined Glenwood State Bank. This year, employee retention has exceeded an eye-popping 98 percent.

A certified public accountant by training, Nelson deduced that his combined “interest in numbers and interest in people [made] community banking a good fit.” He also chose to join the bank to move his family from a large city to a smaller community. His approach to success is simple: He finds the best people he can—those who fit with the bank’s values—and the bank invests in them. Nelson has often moved good employees three or four times to different jobs in the bank to help them find the right fit and keep them on board. “For better performers,” the community bank has even subsidized educational opportunities, he adds.

Next generation—Glenwood State Bank CEO Peter Nelson’s penchant for investing in people extends to youth as well as his employees. Right: Nelson’s Fellowship of Christian Athletes exploring Montana. Below: Nelson stands with children during his most recent mission trip to the Dominican Republic.

Take, for example, employee Karla Johnson. Johnson was hired in 2006 for a part-time position, but she quickly realized the job would not suit her career aspirations. After expressing these concerns to Nelson, he spent the next year trying her in four different roles at the bank to help her find her dream career path. “He treated me like I mattered and with respect,” Johnson says. “He wasn’t about filling a position at the bank; he was about helping me feel fulfilled.” Johnson is now using her skills as the bank’s vice president of compliance.
In November 2015, Glenwood State Bank even created a position for a director of organizational development—unheard of for a bank of its size. For Nelson, it was important to have “someone solely focused on this, whose only job is to grow people.”

Since then, Glenwood State Bank has been busy creating more consistent and comprehensive competencies for the various positions at the bank. It has also taken more than a dozen of its employees for off-site training on topics like managing conflict, improving listening skills and having critical conversations.

The inclusive, employee-focused culture led by Nelson has helped $50 million-asset Lowry State Bank, a smaller Minnesota community bank that the ownership of Glenwood State Bank acquired about 15 years ago. Instead of simply absorbing Lowry State Bank, Nelson and his team and board decided to keep it as a “sister bank,” allowing it to keep its own identity in the communities it serves while benefiting from being part of a larger operation. “From the beginning, we really, really treated it as one organization,” Nelson says.

Nelson hopes technology will help Glenwood State Bank become even more technology-focused—something that could help community banks level the playing field as they face off against larger rivals and nonbank fintechs. “We always want to positively impact the employees and the community, as well as the customer,” Nelson says. “I don’t want to take my eyes off that.”


Karen Epper Hoffman is a writer in Washington state.

“We want Pioneer to last as a community bank and not be gobbled up. So we’ve done everything we could to make the bank into a place where people want to come to work.”
—Christopher Palmer, Pioneer Bank

Forging his own path

Christopher Palmer, Pioneer Bank’s president and COO, motivates customers and inspires employees through his personal connections and a contagious enthusiasm for community banking.

By Elizabeth Judd

Christopher Palmer
President and COO, Pioneer Bank
Location: Roswell, N.M.
Asset Size: $817 million
Founded: 1901
Website: pioneerbnk.com

Among the defining characteristics of Pioneer Bank’s ethos is the Wednesday Group, a professional and personal development group that crystallizes around a discussion of inspirational books. Christopher Palmer, president and COO of the Roswell, N.M., community bank, says group members have read everything from It’s Your Ship by Captain D. Michael Abrashoff and The Advantage by Patrick Lencioni to Chinua Achebe’s novel Things Fall Apart.

Pioneer’s weekly book group is just one of the ways Palmer, a self-described “introverted leader,” forges connections with his employees. Another is his commitment to personal performance interviews. At least once a year, he sits down with each employee for a one-on-one meeting covering everything from that individual’s performance expectations for themselves to what they would do if they were president of the bank.

Industry advocate—Pioneer Bank president and COO Christopher Palmer lives his mission to preserve the community bank industry by supporting his employees and volunteering for local events and organizations. Above: Palmer delivers a presentation during Chaves County’s Character Counts! week, which honors outstanding citizens. Below: Palmer meets with employees during the bank’s weekly business meeting.

Palmer also takes a unique approach to talent retention. He encourages all employees of the bank, which has $817 million in assets and 14 branches, to update their resumes. “Ever since I’ve had a leadership role, I’ve told people, ‘I want you to be successful here or somewhere else,’” Palmer says. He is not concerned if Pioneer is a stepping stone to other career goals, so long as the bank gets each employee’s best right now.

In return, Palmer praises his entire team wholeheartedly for their commitment to the bank and the local community. As a board member at the United Way of Chaves County, he is proud of the fact that 80 percent of his team contributes to the United Way. In appreciation, he lets anyone who makes a donation wear jeans on Fridays.

“At Pioneer, we can do a lot of things those big banks can’t do, because we’re boots on the ground in our communities.”
—Christopher Palmer, Pioneer Bank

Palmer has also backed changes that will help Pioneer remain an independent community bank, something it has been since its founding in 1901, 11 years before New Mexico became a state.
In 2014, for instance, he helped initiate an employee stock ownership plan (ESOP) to discourage acquirers and foster a greater sense of shared mission.
“We want Pioneer to last as a community bank and not be gobbled up,” he says. To that end, he and his team have done everything they could to make Pioneer Bank into a place where people want to come to work. “One of the things that we’re trying to instill in the people who work for us is that we’re not Wells Fargo or Bank of America; we’re community bankers,” says Palmer. “And there’s a huge difference.”

He recently began identifying himself on his annual tax return as a “community banker”—rather than simply a “banker”—an idea he credits to a speaker at an ICBA event two years ago.
Palmer’s passion for local banking has helped Pioneer boost its customer base. What started eight years ago as a direct-mail marketing campaign to show the value of banking locally has resulted in a fivefold increase in checking accounts. “When we talk to people who bank with us, they say it’s because we’re local, we know our customers by name, and we go out of our way to do things well,” he explains.

Although New Mexico is renowned for its natural beauty, Palmer notes that his state has a net population exodus. He therefore ties Pioneer Bank’s mission to the larger issue of the fate of his state. By lending money to small businesses and startups outside the oil and gas industry, his bank is contributing to the health of the state economy. “At Pioneer,” he concludes, “we can do a lot of things those big banks can’t do, because we’re boots on the ground in our communities.”


Elizabeth Judd is a freelance writer in Maryland.

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