Holding company combines banks in two states. Pony Express Bancorp, Elwood, Kan., has completed a merger of its two banks, Pony Express Community Bank, St. Joseph, Mo., and Bank of Paxton, Neb. Combined, the bank has $51 million in assets.. The holding company acquired the $12 million Bank of Paxton in 2006. Bob Means, Pony's president, said Paxton was struggling at the time, and that the plan had always been to get the bank on the right track and then fold it into Pony.. "In the process of turning the bank around, we got to know a lot of people in the community, so the merger isn't holding any real big surprises for customers," said Means. "But there are several products that are now offered that we couldn't offer before. The Paxton bank did not have internet banking and online bill pay, and that's gone over like gangbusters. The bank didn't offer health savings accounts and retirement and educational savings, and so through the merger we were able to roll those out. We've been working on these changes for years now, and having that time gave us an advantage over a typical acquisition.". Means said there is a particular demand for HSAs in both banks' markets. "In our small towns and rural areas, we tend to be self-employed or work for very small businesses, so the high deductible health plans are the only thing many here can afford," Means said. "For farmers and small businesses, it is a real benefit.". Merging is becoming unavoidable for many small banks, Means said. Keeping local identity for a small bank may become a struggle. . "What I'm hearing as I talk to my fellow small town community bankers — and I mean guys who wear short sleeves to work and not fancy suits — regulation is forcing us to consolidate our various brands. When we look at consumer regulation changes, the expectations of more thorough risk management and liquidity management and analysis of your organization, I guess I'm finding it very difficult to believe each little independent organization can make it alone.. "And merging isn't always the best thing. A little bit of identity goes away, and local community independence can disappear. I don't think locally branded banks will totally evaporate, but I do feel our small hometown banks are threatened. I think it's incumbent on those of us who have merged our small banks together to make sure each of our little markets is represented in our decision-making. No matter where the main branch is, we have to stay tuned in to things like school board meetings. We have to stay involved in efforts to build new community parks, for instance. It's a little bit of a trick, but I think it can be done." .N.D. merger ends an era. Drayton Bancorp, N.D., has merged its two banks. North Dakota's second-oldest charter, Bank of Minto, has been folded into Drayton State Bank. The charter was 120 years old. The combined bank has become KodaBank, a $70 million institution with two offices.. "It came down to efficiency," said Peter Anderson, president of KodaBank. "But it was a tough decision. There is a lot of history in the Minto bank. It was just easier to bring the Minto group into Drayton.". The bank hired a marketing firm to help choose a name and roll out information to customers. . "There were some concerns," Anderson said. "Some people hate to see the name change. An old bank can be like a school or a church in a community — it's something that seems like it's always been there.". The newly minted bank's ag markets struggled a bit in 2009, Anderson said. This year, however, is looking up, he said. Since the merger, the bank has enjoyed some growth and the ag market is sending positive signals.. "The commodity prices are weak right now, so there's some worry about that. But there are other good signs," Anderson said. "We had some flooding issues with the Red River, but [as of mid-April], a few farmers are getting into the field. That's about a month ahead of last year, which is great. Now, if you could just do something about those wheat prices." .Iowa HC combines two holdings. Fidelity Company, Dubuque, Iowa, has merged its $46 million Iowa Bank, Bellevue, into its flagship bank, the $322 million Fidelity Bank & Trust. Iowa Bank's three locations closed their doors for one business day in mid-April to make sure the newly combined computer system was nailed down before reopening as Fidelity. . Jim Klein, Fidelity president of the Iowa Bank market, said Fidelity predominantly serves ag-based customers who have not been as hard hit during the recession as other demographics. Consolidating operational and regulatory costs spurned the decision more than economic pressures or a great need to diversify. . "This move has been in the works for a while, and while we've had our problems and stresses like anyone else, there haven't been a lot of issues in our markets," Klein said. "We haven't felt stress in the residential market. There's been some issues on the commercial side, but it appears ag is going to have a strong year, so we're optimistic. But every market has its issues right now. Things will be solid, but not stellar.". The $668 million Fidelity Company holds two other Iowa banks: Community State Bank, Tipton, and Security State Bank, Anamosa.
