How one community bank came to its town’s rescue

The remodeled store exclusively features locally sourced materials. The community bank replaced nearly everything within the grocery store.

Campbell County Bank in Herreid, S.D., saved its community’s grocery store from closure by buying and renovating the business in order to prepare it for its next owners.

By Hannah Merritt

For rural communities, the loss of a business has devastating effects. This is exactly what Herreid, S.D., faced in 2018 when the town grocery store closed its doors. Dean Schwartz, the president and CEO of $140 million-asset Campbell County Bank and a Herreid resident, said the store had been closed for two months when he began hearing grumblings from community members about the inconvenience.

“People were complaining,” he says. “Nobody was happy, especially the elderly people who had to drive 25 miles one way for their groceries. In the summer that’s not so bad, but in winter that’s a concern.”

Just when the community thought the doors would stay closed forever, an unexpected buyer stepped in. According to Schwartz, Campbell County Bank had a Small Business Administration (SBA) guaranteed loan to finance the building and business with its prior owners. Through conversations with the SBA, he learned it had plans to advertise and sell the property. The bank’s leadership team couldn’t bear the thought of the devastating impact the loss would have on the community and knew they had to take action.

“Losing a grocery store in a small town is a lot like losing a school,” Schwartz says. “The bank knew if we didn’t buy it, Herreid would never have a grocery store again. The building would go to auction with the possibility of being turned into a storage unit. We couldn’t let that happen.”

The idea was met with apprehension from the Campbell County Bank board of directors. Naturally, the board had concerns about the cost of renovations and whether the store would be profitable. But ultimately, the deciding factor wasn’t about the profit and loss statement. Instead, it came down to the impact on the community if it didn’t reopen. The board knew it had to be done—but the 60-year-old building needed a lot of work before reopening. “I told them, ‘Don’t worry. I’ll make it happen,’” Schwartz says.

Rebuilding the business

With the board’s blessing to proceed, Schwartz, along with other bank employees, rolled up their sleeves and began gutting the building. After a month, eight dumpsters of debris and many hours of work, the crew was ready to start putting things back together. “We did this all during normal business hours and weekends,” Schwartz says. “One person would work at the bank while the rest would head to the store. We took turns doing this.”

With the community in mind, all materials for the massive project were locally sourced. Some locals even volunteered their time to help complete the remodel. By the end of the renovation, nearly everything inside the building had been replaced. The renovation was completed in early November 2018, and the store opened for business a couple of weeks later. Since opening day, Schwartz says, the store has done well. “The community has been very supportive. Business has been good,” he adds.

One of the biggest challenges, he says, has been finding a qualified owner willing to take over the business from the bank. Unfortunately, due to health complications, the first store owner post-renovation had to go back home for an uncertain period of time. Before leaving, he suggested temporarily closing down the store. “I remember thinking, ‘That’s not going to happen,’” Schwartz says. “Fortunately, a few people within the community came forward and offered to help until we figure out a long-term solution.”

For Schwartz and his team, providing services and support to their local community isn’t just a mission statement written on paper. It’s a way of life.

“We’re fighting tooth and nail for our community,” he says. “That is hometown banking. It’s amazing what can happen when a community comes together.”

“We’re fighting tooth and nail for our community. That is hometown banking.”
—Dean Schwartz, Campbell County Bank

Building momentum in the community

Dean Schwartz

Campbell County Bank’s commitment to community doesn’t stop at the grocery store. The Campbell County Economic Development board (CCED) is doing its part to fill these voids. After years of hard work and negotiations, the CCED brought in some major vendors, including a world-renowned hog genetics company and a 99-megawatt wind farm. These projects paved the way for other development projects, including a second wind farm that is currently under environmental review.

To fill the housing void, Dean Schwartz, president and CEO of Campbell County Bank and CCED board president, and Andrew Van Kuren, CCED’s economic development coordinator, formed a nonprofit corporation with the mission of bringing modern housing options to the community. After a series of community meetings and fundraising campaigns, the group raised $180,000 in a short period of time. With some of the money, they were able to build a spec home. “We sold the spec home to a young family in the community before it was even completed,” Schwartz says.

The group bought two Governor’s Houses, which are part of a state-sponsored program that builds reasonably sized, affordable, energy-efficient homes for income-qualified individuals and families. It also purchased an apartment building and even took on a few “fixer-uppers” in an effort to reinvest in the community. In total, the group has brought 12 new housing options to the community.

Hannah Merritt handles marketing and public relations for the Independent Community Bankers of South Dakota. This is an edited version of an article that was originally published in ICBSD’s The Bottom Line.