Illinois de novo grows by raising service bar

Northwestern Financial Review, Jun 1-Jun 14, 2007 by Dullum, Justin

On May 9, 2007, PeopleFirst Bank, Joliet, 111., surpassed the $50 million asset milestone.

"Your timing for an interview is good," said President Patrick Avendt, who spoke with North'Western Financial Review on that day. "Yesterday, we were below $50 million. We're celebrating. It may seem arbitrary on the surface of things, but for a new bank like ours, growth is what makes us even more confident in what we're doing."

The de novo bank, located in a fast growing community southwest of Chicago, opened in January with $17 million in investment capital. Avendt said a void for community banks was created when, several years ago, two prominent area banks - First National Bank of Joliet and Lenox State Bank - were acquired by much larger banks.

"I worked for a private banking company before those banks were acquired, and we had a hard time competing with their service," Avendt said. "They were that good. After the dust settled on the change of ownership, a few of us looked around and saw a great opportunity."

PeopleFirst attempts to fill this void by employing the standard community bank promotion model: high touch service. But the bank's focus on this niche goes deep into the roots of its organization. Avendt credits the bank's early success to strictly adhering to the service concept; from the organization of the bank's founders and initial investors, to the very name of the bank.

"PeopleFirst's name isn't just a marketing idea," Avendt said. "Banking like this has been a dream of mine for 25 years. This bank is a realization of that dream."

Twenty-two influential people in the community formed the organizing group, said Avendt. He describes this group's cohesion as "very natural."

"Every one of us, for various reasons, had this understanding of service and the importance of service," Avendt said. "From the very beginning, it was clear that our bank was going to be different; that we weren't just providing service as merely a product. All of us believe very strongly in it. To have that many people of the same frame of mind made our philosophy strong."

The group set goals in seeking a wide range of investors. From the beginning, the organizers put a cap of $250,000 on the amount any single investor could throw into the de novo pot. The minimum was $5,000.

"We wanted our economic base to reflect the community," said John Dabrowski, organizer and CFO. "It is a way to get more people involved and more people willing to talk about the bank and what we offer. The fact that we got so many investors involved at so many levels helps get the word out that our aim is more than marketing."

When it came time to staff the organization, the group took matters even further. Banking experience was not a prerequisite for the job.

"With each person we interviewed, we asked ourselves, 'Is this person genuinely nice? Are they polite?*" Avendt explained. "We can train people to bank, but not to be nice. Those are the people we hired. In fact, the person who generates the most new relationships for us had absolutely no banking experience. She has an absolutely charming personality, and she is doing all of the things we can't train people to do."

Our goal isn't to have the greatest asset numbers or the most impressive numbers in any category," Avendt said. "We are going to be the best at customer service - period."

Minnesota bank steps into Wisconsin

The $367 million Mainstreet Bank, Forest Lake, Minn., is crossing state lines into Wisconsin by opening a branch in Hudson.

"Our Twin Cities presence forms a solid base for our bank," said Bruce Soma, president. "Physically moving into Wisconsin is not just a formality. We're well-established in the eastern portion of Minnesota that stretches outside of the Minneapolis metro. We think we already appeal to a lot of customers in Wisconsin and actually having a physical presence shows our commitment."

Vance Haesemeyer, a 29-year veteran banker in western Wisconsin, will head the team as president of business and professional banking for the region. Haesemeyer has worked in this market area since moving to Hudson in 1987.

"Haesemeyer is a well respected community banker and has an excellent reputation," Soma said.

Iowa HC buys three Minnesota branches

Three Minnesota branches of Associated Bank in Austin, Albert Lea and Mankato are being sold to Community Bank, Austin, which is owned by Community National Bancorporation, Waterloo, Iowa, a $297 million company.

All three of the branches are located in Hy-Vee Foods stores. Under the transaction, about $25 million in deposits and more than $3 million in loans will be transferred.

The three branches have been in Hy-Vee stores for more than 10 years and employ 17 people.

Since opening in June 2004, Community Bank of Austin has grown to mon; than $35 million in assets. After the acquisition, the bank will have about $60 million in assets with five branches.