See the member banks celebrating milestones in 2020

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Each year, ICBA honors member banks celebrating their 100th, 125th and 150th anniversaries. After thriving for decades, these community banks are now combining time-tested banking know-how, strong community relationships, technology and strategic planning to prepare them for the next milestone.

By Ed Avis

Today, there is just one bank headquartered in Augusta, Maine: Kennebec Savings Bank, which celebrates its 150th anniversary this year. How has the $1.2 billion-asset community bank outlasted the competition over the past century and a half?

“My sense is the reason we’ve survived is that the bank has been very responsive to customers,” says Andrew Silsby, who has worked at Kennebec Savings Bank for 26 years, including the past six as president. “A lot of our success is in our roots; we’ve never lost touch with our heritage. We allow the common person to save money and buy a home.”

The power of community relationships cannot be overstated when contemplating the survival of independent community banks. But there’s more to it than that. Banks that survive a century or longer are also generally well-capitalized, enjoy low staff turnover, have a keen focus on business essentials and don’t shy away from new technology.

“I get up every day with the goal that we turn this institution over to the next generation in better condition than we received it,” Silsby says, “and I think the previous leaders of the institution did the same.”

This goal is likely common to the leaders of every bank on ICBA’s list of members celebrating 100-, 125- and 150-year milestones this year. Here are how several of these long-lasting community banks have succeeded from generation to generation.

Kennebec Savings Bank collage
Kennebec Savings Bank, which is celebrating its 150th anniversary, shared its first location with Freeman’s National Bank. Over the years, it has added services such as drive-thru banking and banking by phone, which was introduced in 2004. Courtesy Kennebec Savings Bank

James H. Creagan is only the sixth president of First State Bank of Decatur in its 150 years of existence. Creagan says a state bank official recently told him that the $52 million-asset community bank, in southwestern Michigan, holds the state’s oldest charter.

Creagan’s long tenure at the bank—he started there in 1978—and the lengthy service records of his predecessors and other employees is one reason the bank has survived. Customers appreciate seeing familiar faces when they walk into the bank’s lobby.

“When my customers walk into the front door and are called by their first name, that keeps the doors open,” says Creagan, who became president in 1992 and still works as a lender. “I have people I’ve been lending money to since I came here.”

Consistent leadership is also a hallmark of $324 million-asset Sugar River Bank in Newport, N.H.

“Since 1895, we’ve had only seven CEOs,” says president and CEO Mark Pitkin. “That provides continuity and consistency.”

Pitkin, who started at the community bank in 1995 and became president in 2009, notes that Sugar River Bank’s mutual structure enhances its consistency.

“We don’t have to answer to shareholders and earnings calls,” he says. “We have a long-term approach rather than a short-term earnings direction.”

Time-tested business sense

Naturally, another key factor in the survival of century-old community banks is a strong business sense. For some banks, that means being entrepreneurial; for others, it means being fiscally conservative. Either way, survival requires a focus on the dollars and cents.

The success of 100-year-old Reliabank Dakota in Estelline, S.D., is due to a clearly defined growth strategy, says David Johnson, chairman of the $473 million-asset community bank. Since the 1990s, the bank has added four branches by acquiring two others and has opened four de novo branches.

“We’ve been very strategic in our growth,” he says. “In South Dakota, there’s been a dramatic population shift based on farm consolidation. The vast majority of counties are losing population, so we’ve said, ‘Where are those people going?’ And they’re going to the [Interstate 29] corridor, so all of our nine locations are in growing communities along that corridor.”

Reliabank Dakota plans for the next gen

Group of Reliabank Dakota bankers in the 1950s
Taken in the 1950s, a group of bankers pose for a photo at Reliabank Dakota, which is celebrating its centenary this year. Courtesy Reliabank

Keeping an eye on growth has kept Reliabank Dakota thriving in recent decades, says Jan Johnson, who sits on the community bank’s board of directors.“Part of thriving is having an entrepreneurial spirit,” Johnson says. “There are really two options: You can keep your little footprint and often get gobbled up by a larger bank; or you can become the entrepreneur and look for opportunities to grow. And we’ve been able to do well in that way.”

As Reliabank, which turns 100 this year, has grown beyond its hometown of Estelline, S.D., it has maintained a community bank feeling by combining technology and personal customer service, says Reid Johnson, Reliabank Dakota’s director of marketing, whose father, David Johnson, is chairman. His brother Ethan also works at the community bank.

“We’ve had the strategy of offering big bank products with hometown service,” Reid says. “We have up-to-date technology, such as online banking, remote deposit capture, online account opening, an app and person-to-person payments, but when customers do need help or have a problem, our customer service reps are top notch. Those two things combined allow for the hometown community feel.”

The Johnsons have created a plan that will keep Reliabank Dakota in family hands into the next generation.

“The main obstacle to having continued community bank ownership is management succession,” says David Johnson, adding that the family’s plan ensures that Reid and Ethan eventually take over. “Even though the boys would like to send the old man out to pasture sooner than he’d like to go, we’re still working through the issues of succession.”

Another century-old bank that has survived by growing is $385 million-asset Farmers & Stockmens Bank in Clayton, N.M. When the current president, Larry Fluhman, joined the community bank in 1986, it had about $35 million in assets, he says. In 1992, the owners sold the bank to a family banking group in Denver, which subsequently sold it to another family in 2009.

“We kept the charter and local board and leadership, but [the new owners] brought additional capital and increased knowledge of banking in general,” says Fluhman of the 1992 sale. The 2009 sale also brought in fresh capital, allowing the community bank to keep up with regulatory and technology changes. Since then, Farmers & Stockmens Bank has added branches in Colorado Springs, Colo., and Denver. It also opened a part-time branch in Roy, N.M., a rural community without any banking services.

“We wouldn’t have been able to survive if we hadn’t grown,” Fluhman says. “The capital injection and the growth of the bank allowed us to offer new, modern products everyone wants.”

Old dogs can learn new tricks

Few independent banks could survive today without adopting new technology.

“We offer the same products—such as ACH origination, ATM services, mobile banking, remote deposit—that Wells Fargo and the other big guys offer,” Fluhman says. “So, we’re still a hometown bank that knows your kids’ names and where you go to church and how we can help you, but we also have the ability to offer the innovative products that the big banks are offering.”

The requirement that a community bank have a solid technology base became evident to many bankers during the COVID-19 crisis. While lobbies were temporarily closed, many customers needed to rely on mobile and online services to access their money and continue doing business.

“We’ve seen a 50% increase in the use of mobile and online banking during this time period,” Silsby says, adding that the pandemic forced Kennebec Savings Bank to quickly spin up new technological procedures. “We have hopped, skipped or jumped seven to 10 years in our ability to figure out processes that otherwise might have taken a long time.”

Of course, the essential survival tool of all independent community banks is a laser focus on community.

At Sundance State Bank in Sundance, Wyo., that focus means sometimes putting community ahead of profits, says Andy Miller, president of the $193 million-asset community bank, which is celebrating its 125th anniversary this year.

“Sometimes, making a decision that isn’t in the best interest of your bottom line, but makes sense from a community relations perspective, in the end can help the bank stay healthy,” Miller says. “Sometimes we are willing to work with customers other banks wouldn’t. If things go south, we always keep our reputation in mind and do things in a manner so that both parties can walk away feeling they were treated fairly. We don’t want a customer to walk away with a bad taste in their mouth, because the biggest thing we have is word-of-mouth referral.”

Boosting ag for 125 years

Agriculture is a tough business, with wild price fluctuations, unpredictable weather and fickle market demands. A good community bank can help farmers and ranchers deal with those issues, and that’s the aim of 125-year-old Sundance State Bank in Sundance, Wyo.

“We have a little different approach from a loan structure when it comes to dealing with ag customers,” says Andy Miller, the community bank’s president.
“We build flexibility into the structure.”

Miller says the structure encourages ranchers to pay down debt when times are good but permits them to conserve cash when money is tight. That helps keep the ranchers successful, which in turn keeps Sundance State Bank profitable.

Sundance State Bank doesn’t rely solely on agriculture, though. “In Sundance and the other communities we serve, we’ve got nice downtowns and a lot of tourists, so there’s a good mix of businesses,” Miller says.

Having consistent local ownership helps ensure that all of the businesses in the area consider Sundance State Bank their local lender, he says.

“We are 100% locally owned, and all of the board members live within the communities we serve,” Miller adds. “They know what’s going on. They have a good pulse on the community and a good knowledge of the banking field.”

Small business focus

Being community minded also means helping local small businesses thrive. While many competitors of Sugar River Bank have grown to be statewide or multi-state entities, Pitkin says his community bank has remained focused on the six small- or medium-sized towns it serves.

“We’ve always wanted our primary mission to serve our communities and not grow for growth’s sake,” he says. “When I get up in the morning, I drive down Main Street and smile when I look at all those businesses we have helped.”

“We do a lot for our community, because they do a lot for us and we know how important it is to have a healthy economy, a healthy community.”
—Andy Miller, Sundance State Bank

Serving a community also means getting personally and philanthropically involved. Miller says employees of Sundance State Bank are allowed to use a certain number of paid work hours to volunteer outside of the office. The community bank encourages employees to volunteer 10 hours a year, but many go well beyond that. The bank also supports programs financially.

“I don’t think I’ve ever turned away a donation or sponsorship request,” Miller says. “We do a lot for our community, because they do a lot for us and we know how important it is to have a healthy economy, a healthy community.”

At First State Bank of Decatur, the financial support extends to the local weekly newspaper, Creagan says. The community bank buys advertising in each issue … not so much because the bank benefits from the promotion, but rather because the newspaper is so important to the community, he says.

The bank also literally helps feed its hometown: It donated a building on Main Street to the local food pantry. “Doing that doesn’t feed our bottom line, but doggone it, it’s a nice thing,” Creagan says. “And you might have a customer who opens an account because of that.”

“If we were an organization without significant roots in the communities we serve, surviving would probably be more difficult”
—Mark Pitkin, Sugar River Bank

Surviving 100, 125 or 150 years is a rare feat for a business in any industry, let alone one as dynamic as community banking. But community banks that achieve those milestones must have a combination of characteristics that support their own bottom line, the financial health of their clients and the viability of their entire community.

“If we were an organization without significant roots in the communities we serve, surviving would probably be more difficult,” says Pitkin of Sugar River Bank. “When employees know that the survival of the bank is not only for their own welfare but also the survivability of their communities, they take that to heart.”

Member Milestones: 2020’s full list

These community banks deserve a round of applause for 100, 125 and 150 years of success.
Community banks celebrating 100 years
Community banks celebrating 125 years
Community banks celebrating 150 years

Ed Avis is a writer in Illinois.