With rich histories and proud legacies, community banks have been the cornerstone of the American financial system since the 19th century. Every year, ICBA honors member banks that have reached significant milestones. As vital members of their communities, they have important lessons for all of us on the value of learning, growing and remaining relevant for the people they serve.
By Julie Kendrick
Whether it’s the latest digital innovation or new regulations, rapid change is the name of the game in today’s banking industry. But as the 68 ICBA member banks hitting major milestones this year show, relationship banking remains alive and well. “These are all legitimate 100-year-plus banks,” says Loughlin Cleary, ICBA’s executive vice president of business development. “They didn’t just buy another bank and say their bank is that old. They’re often multigenerational, family-owned and closely held banks. They’ve been a part of their communities for multiple generations, and their customers often represent multiple generations, too.”
The group of community banks, which are celebrating their 100th, 125th or 150th anniversaries, have survived and thrived through economic downturns, from the Great Depression to the Great Recession. They’ve fended off competition from megabanks, tax-advantaged credit unions and startup fintech companies. These tried-and-true financial institutions have soldiered on, making a difference in the towns where they set up shop so many years ago.
The community banks profiled here prove that, despite being founded in the 19th or 20th century, they can adopt new technologies and adapt to meet the needs of 21st-century customers.
Fun Fact #1
Eight community banks celebrating milestones this year hail from Illinois.
That deep-rooted presence in a town makes a difference, Cleary says. “These milestones signify their contributions and steadfastness to support their community. America as a nation celebrated its 243rd anniversary in July, and community banks have been part of this country’s journey for a majority of that time. They’re the places where deposits are made, where local entrepreneurs seek loans and trusted advice, and where people go to find good, steady jobs.
“When you read this list of milestones, you’re looking at businesses that are amazing corporate citizens beyond just banking. In many cases, they’ve been there since the town was founded. In so many ways, they are the beating hearts of their communities.”
Cleary notes that while ICBA is celebrating its 89th birthday this year, its oldest member bank is 212 years old. In fact, 55% of community banks are more than 100 years old, according to Cleary. “We’ve been here with our members through so many years, providing advocacy and representation in Washington, D.C., with regulators and policymakers. It’s a journey we’re so grateful to have been on with so many great community institutions,” Cleary adds.
Success stories motivate at Fredonia Valley Bank
Since he started as a bank teller right out of college in 1987, J. Brent Bugg has worked for 125-year-old Fredonia Valley Bank in Fredonia, Ky. Just nine years after he joined the $83 million-asset community bank, he was named president.
“We are very proud of reaching our quasquicentennial,” he says. “One interesting fact is that we have had only eight presidents since we were founded in 1894.”
One secret to the bank’s longevity, he says, is in the community-focused board of directors. “We have been very conservative over the years, and that has worked toward keeping us around,” Bugg says.
Another reason for the bank’s success is its community involvement. “We are active in both communities, sponsoring a Dave Ramsey financial literacy class at Lyon County Schools in Eddyville and sponsoring a yearly scholarship for three of our local county schools,” he says. “We support all the sports teams, camps, Relay For Life Cancer drives and more.”
Fredonia Valley Bank celebrated its milestone with a free document shred day in June, and the community bank is planning an even bigger event in the fall with a concert on the outfield of the Fredonia ballpark. The festivities will include bands, craft booths, a chili cook-off, games and food. Donations will be accepted during the night for Operation Overhaul, a community drive to improve the ballpark, playgrounds and facilities in Fredonia.
Bugg says he looks forward to Fredonia Valley Bank remaining independent for many more years.
“I have seen a lot of changes in my 30 years, and many hurdles for small community banks, but I have also seen more local success stories that we have helped,” he adds. “These success stories will keep us motivated to remain a vital part of our community.”
A family affair for 125 years
Bonanza Valley State Bank in Brooten, Minn., has always been owned and managed by the Bohmer family. The $64 million-asset community bank has been an ICBA member for 82 years—almost ICBA’s entire history.
The Bank of Brooten was founded in 1894 with an initial stock investment of $10,000 by John Bohmer. The family has maintained control of Bonanza Valley State Bank ever since.
John Bohmer’s grandson, John O. Bohmer, is chairman of the board and celebrated his 98th birthday earlier this year. “My cousin, David Bohmer, is president and CEO, and David’s daughter, Juli, is in line to continue the Bohmer banking family,” he says. “I have been with this bank since 1946, when I got out of the army after World War II.”
Like many community bank leaders, Bohmer is deeply embedded in his community. He wrote and self-published a 600-page book about Brooten, a central Minnesota town of 743 whose nickname is “Heart of the Bonanza Valley.”
“There have been some tough economic times during the years, and we have survived all problems,” Bohmer says. “We have updated our equipment several times, built a new building for the bank and have continued to educate our personnel for community, agricultural progress and industrial development.”
Bohmer says the community bank is “looking forward to continued growth in our community, both industrial and agricultural.” The community bank changed its name in 1980 from State Bank of Brooten to Bonanza Valley State Bank, a rural region of Minnesota where many farmers depend on groundwater to irrigate their fields, to reflect its involvement with irrigation development.
Bohmer adds: “We are the key promoter of irrigation in our area. We feel our bank is the center of activity and is relied on for community development.”
Fun Fact #2
In 1869, the Bureau of Engraving and Printing began producing the faces and seals of U.S. banknotes. Before this, they were made by private banknote companies and the bureau only handled the sealing, trimming and cutting.
Mississippi’s oldest bank
One of the oldest banks ICBA is honoring this year is $230 million-asset Bank of Holly Springs. The 150-year-old community bank is located in Holly Springs, Miss., a 7,700-person city that was founded in 1836.
“We are proud of our longevity and proud to be the oldest bank in Mississippi,” says Steve Gresham, president and CEO of Bank of Holly Springs.
But age doesn’t mean the bank isn’t keeping up with the times. Its marketing materials tout how it offers “today’s technology blended with our southern hospitality” to deliver “a superior banking experience.”
“During my 36 years here, I have seen a lot of regulatory changes, with many of them not being good for the banking business or the customers that we serve,” Gresham says. “I’m thankful to ICBA for being a voice for banks like us and for working to help protect the community banks that are so vital to our hometowns.”
Fun Facts #3 & #4
In 1869, Ulysses S. Grant, a Civil War general, became president of the United States. That’s the same year 14 of this year’s milestone banks opened.
In 1919, 40 ICBA member banks had just opened. Their customers drove Model Ts, watched silent movies and witnessed the curse that Babe Ruth invoked on the Boston Red Sox. The team traded him to the New York Yankees right after he won them the 1918 World Series.
A sesquicentennial in Illinois
F&M Bank, also known as the Farmers & Mechanics Bank, in Galesburg, Ill., has been in business for 150 years. Of the 436 banks in Illinois, the $335 million-asset community bank is the 13th oldest and ranks among the oldest 3% of all banks in the United States, according to F&M Bank’s president and CEO, Doug Sanders.
“As a community bank, all of our decisions are based on what is best for the individuals, families and businesses we serve,” Sanders says. “Our first job is to meet the financial needs of our customers. From our Mini-Millionaires Club, a savings account for kids, to the most comprehensive business banking services, we work hard to embrace community banking. We accomplish that by offering competitive products, quality advice and outstanding service.”
The bank has made a considerable commitment to its community, with F&M Bank employees volunteering nearly 7,000 hours every year and the community bank donating more than $1 million to charitable causes over the past 12 years.
“Our interest in the community doesn’t end when our doors close,” Sanders says. “We know it takes teamwork to succeed, and we work hard to make central Illinois a great place to live. Our staff is involved in everything from schools and churches to service clubs and economic development.”
Fun Facts #5 & #6
Back in 1869, popular songs included “Shoo, Fly, Don’t Bother Me” and “The Little Brown Jug.”
In 1894, if you wanted to attract customers, you could enter them in a contest to win tickets to see Mark Twain perform. Back then, he was the highest-paid writer in the country after becoming a national celebrity from his novels and his pioneering stand-up comedy act.
A century of friendly service
Harwood State Bank was founded in 1919. For the past 36 years, Tom Stennes has been president of the $40 million-asset community bank in Harwood, N.D.
“We have survived by being conservative in nature and having belief in the people of our community,” Stennes says. “We have always tried to support our communities, because without the communities, we wouldn’t be here.”
The Articles of Association for Harwood State Bank were created on June 28, 1919. Nine investors purchased stock in the new corporation, contributing a total of $18,000 of capital. On Aug. 18 that year, J.C. Stennes—Stennes’ grandfather—received a $10,000 bond, and the bank was opened on Aug. 29.
Despite challenges during the Great Depression, Harwood State Bank was one of the banks to survive that era with a strong capital ratio thanks to its conservative practices and faith in the community.
“We are exceptional in providing personal and friendly service to individuals and businesses,” Stennes says. “I like to say we have a proven history of stability with a personal touch that you can count on. We are looking forward to continue serving our customers and meeting their ever-changing needs in the future.”
As to what that future might hold for the industry, he says, “It is hard to predict the future with changes that are happening so fast, such as in the fintech arena.
“When I started working at the bank in 1976, many of the things we do now were not even being imagined then.”
Wisdom from a first-generation community banker
There’s only one Primghar in the world. The Iowa town, which has fewer than 1,000 people, got its name from the first letter of the eight people who had a major part in its platting: Pumphrey, Roberts, Inman, McCormack, Green, Hayes, Albright and Rereick.
Gerald Leng, president and chairman of $210 million-asset Savings Bank in Primghar, has been in his position for 31 years, and Savings Bank has been a member of ICBA for 71 years.
Leng says it’s the people working at the bank who make the difference. “If I’ve done anything right being boss, it’s been in hiring the right lieutenants,” he says.
The community bank’s slogan is “We do simple better,” and Leng tries to keep things simple in every phase of the bank’s operation.
“We were the smallest bank in deposit size in 1988, and now we’re the largest in 2019,” he says. “It took a lot of hard work and determination, and maybe a little good luck, although sometimes you have to create your own good luck.
“Plus, a bank is only as good as its customer base, and we have a good base. We take care of our customers, and we get them answers fast. We’ve continued to grow. The secret is to just do your job and keep on doing it.”
Leng came from a farming background, not community banking. After serving in Vietnam, he started working at the bank as an income tax preparer, and his role at Savings Bank grew from there. He purchased the bank in 1988.
While Leng is a first-generation community banker, his daughter, Jamey Rehder, is secretary of the board and has been a loan officer for 20 years.
Leng’s two sons run the family cattle feeding operation, but Rehder has indicated an interest in running the bank some day.
Julie Kendrick is a writer in Minnesota.