Oldest banks thrive on a legacy of service

As BankBeat looks at the last one-and-a-half centuries of the American Bankers Association’s contributions to the financial industry, it makes sense to also look at some of the oldest banks in the nation. Some of these banks were founded before the ABA and were part of the impetus for the trade group. After all, without banks, there would be no need for an association..The 10 banks we looked at ranged from one office to 120 offices, and from $82 million in assets to $31.6 billion. Half were founded before their territories were states, but all were founded in the 19th century. BankBeat asked each banker what they felt their bank’s “secret sauce” to longevity was, whether that endurance had any impact on competitive advantage, and what was going to be needed to thrive well into the next century. The response that came up most often to any of the questions was adaptability. First National Bank of Litchfield, Ill., has been in the same location since its founding in 1860. It has two offices with one close to Historic Route 66. Social media has not played a part in the $140 million bank’s long life as it has shunned a social media presence. .“Once you start it, you’ve got to manage it,” said President and Chair Ken Elmore. And the bank isn’t one to toot its own horn or submit a lot of press releases to the local newspaper. He feels much of the bank’s success has come from a partnership with the community and the lack of staff turnover. “We have people who have been here well over 30 years. Our customers know everybody by their first name. … All the loan officers are available, I hate to say 24/7, but it really is,” he said. The loan customers have the bankers’ cell numbers and will call evenings and weekends. “There is no such thing as bankers’ hours anymore.”First Financial Bank, a $5.6 billion bank in Terre Haute, Ind., was founded in 1834 and is the oldest bank in our list. It also is the oldest national bank in the state and the fifth-oldest national bank in the nation, holding the 47th charter granted in the United States. Bob Renock, the bank’s chief marketing officer, attributes its long tail of success to a “disciplined blend of tradition and innovation.” “We’ve maintained a relentless focus on soundness, community relationships and long-term growth” and have weathered economic challenges by “adapting with purpose,” Renock said. .Connection Bank in Fort Madison, Iowa, traces its roots to 1854, but also is a blend of that history along with that of KSB Bank, with which it merged in 2016 and the two became Connection Bank. The logo, three interconnecting rings, represents what Chief Strategy Officer Kim Fehseke considers the $514 million bank’s “most vital priority — the way we treat everyone: our employees, our customers and our communities.”She continued: “Supporting the well-being of all three allows us to have deep connections and partnerships in our marketplace, in turn being looked to as an invested leader in our community’s success and ability to thrive.”Root River State Bank of Chatfield, Minn., has a long history in the state, as does its owners. The First State Bank of Fountain was started in 1901, and the Johnson family became involved with the bank in 1906. Chuck Johnson, Jr., who runs the bank today, explained his grandfather became president of the Fountain bank in 1916. His father and grandfather worked alongside one another through the 1950s. “The Chatfield bank came up for sale in 1966 and that is when Dad purchased Chatfield and managed both banks,” he explained. “I became a part-time employee of the Chatfield bank in 1978 and then became full-time in 1984 after graduating from the University of St. Thomas in St. Paul, Minn. I officially became involved with the Fountain bank in 1987. I had the privilege to work with my Dad until his passing in 2009. The banks are still separate but under my ownership.”Charles Sr., and his wife, Patricia, both received the Pioneer Banker award for 50 years in banking from the Minnesota Bankers Association. At the time Patricia received hers, Charles Jr. was MBA chair and got to present the award to his mom. That long-term commitment to the community is what Johnson Jr., feels is its secret sauce: “Knowing our community and being in tune with what’s going on, what the needs are, being able to adapt if there [are] changing needs.” Bank of the Rockies in Helena, Mont., was founded in 1883 with $50,000 in capital. How the bank, now at $260 million in assets, made it through all those years, Mike Grove, bank president, CEO, chair and owner, isn’t quite sure. But the record books show the bank has always been well run and epitomized the quintessential community bank. “We care about our customers, we know our customers, we’re engaged with our customers,” he said. When the pandemic hit, a lot of the bigger banks in the area cut hours, but Bank of the Rockies doubled down. He told the office managers to close loans through the drive-thru if they had to, and if employees weren’t busy, have them call customers to check in and see how they were doing, see how the bank could help them. “We even delivered groceries. I’m really proud of that,” he said.The bank has been recognized for its advocacy for the aged before it was a thing, and laws have changed as a result. Jennell Huff, who works with the bank’s fraud protection and financial literacy efforts, will be receiving ABA’s George Bailey Distinguished Service Award for going above and beyond expectations for her work in that area. The bank also has partnered with a few military organizations to offer fee-free ATM use for veterans and offers them special accounts. “When [veterans] open an account, we go out and greet them with a handshake, and in the bank employee’s hand is a coin,” as coins are a military tradition and an honor, Grove said.First National Bank of Omaha is Nebraska’s largest bank at $31.6 billion in assets and is one of the largest privately held banks in the U.S. In its tenure, it has experienced six generations of leadership from the Lauritzen family and is the fourth-largest agribusiness lender in the country. The bank has continued to innovate since its founding in 1857 by Herman and Augustus Kountze. “We were among the first banks to issue credit cards, long before most other banks did, and we were the first U.S. company to use fuel cell technology as its primary power source,” according to the bank’s website. The bank is now the nation’s 15th largest credit card issuer, has specialized departments like transportation and is using NIL (name, image, likeness) partnerships to promote its debit card. Ernie Strube believes The Goose River Bank’s strength has come from keeping its focus and checking unbridled ambition. The bank’s “primary focus has been to serve the communities we are in…We have kind of a niche in small communities and ag lending,” said Strube, president and CEO of the $171.8 million bank in Mayville, N.D. “Strategically that’s where we want to be. Some banks seem to lose their focus … instead of staying with where they started and are good at.” The fact the shareholder group has never had a desire to sell also is a blessing, he said.First Dakota National Bank in Yankton, S.D., was the first fully chartered national bank in the Dakota Territory. “In 1872, South Dakota didn’t exist, so getting chartered nationally was the only option. There were other private banks at that time, but none that were approved and licensed by a government entity,” said Rob Stephenson, CEO of the $3.05 billion bank. .Agriculture has played a large role in the bank’s history. Before the bank crossed the $1 billion threshold, it was the second-largest ag lending community bank in the country. “Since we’ve exceeded that size, we have consistently been in the top 20 of all banks in the country, of all sized banks,” Stephenson said.The bank also has initiated the Keep Farmers Farming program, a project with the state’s governor and the South Dakota Ag Foundation, which was recently handed over to the ag foundation. The program works with farmers on estate planning and transition.Stephenson said the bank’s consistency always, not just some of the time, played a role in its 153-year history. “We didn’t stop during the early days covid, when there was incredible uncertainty and serious questions about whether banks could survive. We kept ensuring customers that we would be there for them and would provide the loans they needed … our consistency over long periods of time helps set us apart.”The $539 million Baraboo State Bank in Baraboo, Wis., is deeply rooted in its market and is known for its historic support of local businesses, like the once-defunct Ringling Brothers Circus. Baraboo “was the bank that gave them initial financing and was the key sponsor for Circus World for many decades,” said Pat LeFevre, the bank’s president and chief credit officer. The bank opened in 1857 and had black-and-red bank-issued bills in denominations of $1, $2, $3, and $5.LeFevre believes the bank’s longevity is due to the bank’s ownership taking “great pride in being owners of this bank … they enjoy being a pillar of the community,” he said. The bank’s focus on liquidity and growing steadily, not quickly, also play a role.First Northern Bank of Wyoming, Buffalo, was founded in 1885, five years before Wyoming became a state. It was a private bank for two years before getting its national charter, the third national charter in the Wyoming Territory. The bank’s name refers to it being the first bank north of the Platte River. George L. Holt served as president, and W.J. Thom served as the bank’s second cashier. The McBride family bought in later. Today, both the Holt and McBride families retain majority ownership of the bank. The current bank president and CEO is Nick Thom. While he is the great-great grandson of W.J., his involvement in the bank is “basically a coincidence. I’m the first Thom to work in the bank since W.J. Thom retired,” Nick said. .Nick sees the bank’s success as due to its “unwavering belief that we could serve our communities better by remaining an independent community bank. Our ownership has never viewed the bank as an investment to be sold,” he said. He also attributes the bank’s survival to its emphasis on succession planning for staff. “We’ve always been very focused on ensuring we have a continuous succession of highly qualified bankers at all levels,” Nick said. “We truly believe in hiring the very best and trusting them to do what’s right for our customers.” .Does longevity bring a competitive advantage?The banks were split on whether longevity was a competitive advantage. Half said it was while others didn’t think it did or weren’t sure. “In an era of fintech startups and faceless platforms, being a stable institution with a nearly 200-year track record resonates deeply with clients looking for reliability,” Renock said. “Longevity isn’t just ‘we’ve been here a long time so bank with us,’” Nick Thom said. “It’s proof of the bank’s resilience, adaptability, and deep expertise built up over generations of employees.” First Northern’s ability to weather economic downturns and major world events means the bank was able to adapt quickly and with sound banking practices.Fehseke agrees with this because longevity “tells the story that the business has been able to stand the test of time.” However, longevity means nothing without adaptation. “We may be the oldest bank in the state dating back to 1854, but we definitely don’t act like it,” said Matt Morris, Connection Bank president and CEO. “Without evolution, longevity will get lost in the rear-view mirror,” Fehseke said, as the bank works to remain competitive locally as well as on a national level.As much as he would like to think it does, Johnson wasn’t sure longevity was much of a competitive advantage. “Times have changed so much,” and loyalty doesn’t seem to be as prevalent as it once was, he said. In the past, if a rate wasn’t the best on a deposit or loan product, he could still woo the customer by showing how involved the bank was in the community, how it had helped area businesses or the school, things that are hard to quantify or put a monetary value on. “It made a big enough difference to the customer that they would continue to bank with us.” Now, “even if we’re a little bit off one way or the other, the customer is much less likely to take that into account and perhaps move,” he said.“I think the length of time you’ve been in business has negligible value. The biggest thing you have to do is take care of your customers,” Strube agreed. “If you’re not going to continue to be progressive, it doesn’t matter how long you’ve been here, you won’t be here much longer.”What must banks do to thrive well into the next century?The Litchfield bank is now enjoying banking relationships with third-generation customers and feels the pandemic and the necessity it created to adapt helped prepare the bank for the next century. “We did a lot of PPP loans outside the bank on hoods of cars,” Elmore said, which helped the bank improve its ability to pivot quickly, which will play a role in the bank’s future success. LeFevre said, “Learning how to embrace AI is going to be important to every single bank out there that wants to last.”While First Financial also thinks the future depends on a “strategic fusion” of humans and technology, Renock also feels sustainable growth will come through pursuing value. “Whether through organic growth, thoughtful M&A or strategic innovation, our compass remains pointed at long-term prosperity, not short-term hype.”And, while Root River did believe the advent and application of AI to be a future factor, Johnson also focused on the future of farming. Survival will require “having ag still be important to the country because we’re primarily an ag bank,” so the future will depend on “a vibrant ag economy [with] family-type operations, not corporate,” he said.Grove will be turning the bank over to two sons, “and they will be the next generation of this” with the opportunity to build on the bank’s “stability, safety, soundness,” which are a big part of rural America, he said. The bank also is studying cryptocurrencies because the bank has an “attitude that if our communities need it, let’s figure out a way to do it.” Strube agrees with Grove that the future of community banks in rural America is attracting talent from the next generation, which Strube said is “probably the most difficult task we have in rural North Dakota and probably for most rural banks,” the question of succession and bringing in top talent. Strube said the bank’s job in this area is to make “sure we do a good job of providing good careers, good training and providing an environment people want to work at.”