Iowa bank adds new branch and boosts efficiency

Northwestern Financial Review, Mar 1-Mar 14, 2005 by Dullum, Justin

Patriot Bank, Brooklyn, Iowa, is building a full service branch in Grinnell, Iowa. And while it's waiting until September for the mortar to harden, it's streamlining its insurance arm.

Bank President Jack Arendt said the Grinnell branch, which is slated to open in September, would be a significant departure for the bank. The town has a population of roughly 10,000.

"If you add the populations of the other towns we're in, they don't add up to that much," said Arendt. "And we've never started from scratch, so it's a new experience. Grinnell is a pretty vibrant town, and there are some major employers."

The $77 million Patriot Bank was created in January of 2004 when Poweshiek Bank in Brooklyn and Gibson Savings Bank in Gibson merged. Its recent activity comes as the dust settles on the merger. Arendt said the insurance move is less significant than the branch effort, but that it will add efficiency to the bank's operation.

Before the merger Jack's brother, Craig Arendt, was president of Gibson Savings Bank. Arendt Insurance operated out of the bank. Craig Arendt owned the insurance agency outright. Jack Arendt headed Poweshiek Bank, which owned its insurance agency.

"After the two banks came together, it didn't make sense for the Patriot Bank to own one agency and for an individual to own one," said Jack Arendt. "It made sense for Craig to sell it to Patriot Bank. With our move into Grinnell, he wouldn't have had the time to run it anyways. We've turned control over to employees we can trust."

On paper, the insurance move creates a 'limited purpose branch' in New Sharon, Iowa, where Arendt Insurance had an office. Jack Arendt said the bank has no plans to expand the office to include bank services.

"We know a lot of the bankers in those towns, and some of them are relatives," he said. "We have no plans to go into those towns and butt heads with them."

Nebraska banks seal insurance deal

Two Nebraska banks have joined forces in an insurance company. First National Bank of Johnson and Saline State Bank, Wilber, have acquired the Hickman Agency, LLC, in Wilber. First National Bank President Mike Casey said the move, which follows a series of reorganization efforts amongst the involved holding companies, is also an investment in relationship building.

"One of the main reasons we got in on this deal was we thought there would be a chance to participate in loans in the future," said Casey. "This is a good relationship we can build upon."

Casey is no stranger to insurance. Casey Agency is located within the $59 million First National Bank.

"We've offered insurance for 20 years," said Casey. "Our main bank is in Johnson, which is a small community. Back when we opened the insurance office, the independent insurance agents usually worked out of their homes. When they were out with customers, there wasn't anyone around to take calls and messages and deal with paper work. We found that opening an agency and an office was beneficial to the existing insurance market in the town."

Casey said insurance and banking share similarities. "We think insurance has to be about service too," he said. "We're a small town that's completely agricultural and our way of doing business in both banking and insurance is valued."

Kansas bank's name no longer features Burden

In January, The Kansas State Bank of Burden changed its name to Emerald Bank. The $8 million bank has one branch in Oxford, Kan. President Richard Harrell said the name change went smoothly.

"Everyone seemed to be very receptive of it," he said. "In today's world, everyone is more accepting of change. And we like the change. It makes everything easier for us. We don't have current plans to add another branch, but if we do, that will be easier too."

The bank has been in business in Burden since 1884.

"We're about as entrenched in a community as a bank can get," said Harrell. "The economy is weak here and there aren't many businesses but this is a neat little town. It's very comfortable."

Harrell said the people in town have a can-do spirit, which is a necessity when tackling the daily challenges of keeping the community up and running.

"I can't say I really have one strategy," said Harrell. "You have to be flexible. It can be sad to see what happens. Our lumberyard closed down and we had a meat locker that closed down this past year. But, we also had two new businesses open, so that was good."

When asked about whether the bank ever received grief for having the word 'burden' in its title, Harrell chuckled and said no.

"But there was a bank in Missouri called the Bank of Tightwad," he said. "They're closed now, but they had people from all over the country open checking accounts just so their checks would say 'tightwad'."