The Growing Season

The Growing Season

Farmers National Bank of Emlenton

Farmers National Bank of Emlenton

When miners worked in the craggy, shadowy underground some 140 years ago, they faced a persistent problem: their pants kept ripping.

Thanks to a Bavarian named Levi Strauss, necessity led to invention, and sturdy, reinforced blue jeans made their first debut in the post-Civil War era.

That rugged blue denim rapidly became the uniform of miners, farmers, ranchers and rebels.

In time, denim evolved to become the teenagers’ trousers of choice, the egalitarian emblem of America all over the globe, and the fashion equivalent of casual comfort. Blue jeans were catapulted from the working-class demographic to the height of Hollywood couture.

For The Farmers National Bank of Emlenton of today, in western Pennsylvania, that beloved denim is also making another fashion statement.

By donating $5 a month, each of the bank’s 140 employees can wear jeans to work on Fridays, a promotion that has been going on since November of 2012. The money collected is then donated to noble causes such as the American Heart Association’s Heart Walk, and The Boys and Girls Club along the Allegheny, an afterschool program for young people ages 8 to 18.

Community Jeans Day was the impetus behind the bank’s recognition as a winner of PACB’s “Grow Your Community” Award. But that promotion is just a small patch in the smooth fabric that is The Farmers National Bank.

William Marsh, Chairman, President and Chief Executive Officer of the company and the bank, said The Farmers National Bank was founded in the year 1900 by a small group of businessmen in a tiny western Pennsylvania town with $50,000 in capital. Leaping through the years, the bank’s assets now reach a market cap of nearly $60 million, and assets of $700 million.

Today, it is the only independent bank headquartered in Venango County, a rustic pocket of Pennsylvania known for its rich oil heritage and its 1850s-era oil boom.

The rapidly sprouting bank is a wholly owned subsidiary of Emclaire Financial Corp, trading as EMCF on NASDAQ.

After a flurry of bank branch openings through the latter quarter of the 20th century, the bank now has 17 offices in 9 counties–Venango, Butler, Clarion, Clearfield, Crawford, Elk, Jefferson, Mercer, and Allegheny counties.

Its 17th full-service office was opened in Aspinwall in August 2016. It was the bank’s second office in Allegheny County, following the acquisition of the United American Savings Bank in the bustling South Side area of Pittsburgh.

For the 117-year old bank that wears community service on its sleeve, they are ushering in the next generation of banking, poised comfortably at the intersection of Old World tradition and New Age technology. And as any seasoned farmer knows, cream always rises to the top.

In transitioning from the days of the ledger, adding machine, handwritten receipts, and a bank branch on every street corner, to the interconnected era of ATMs, online banking and e-commerce, they must always stay on the cutting edge of technology to find new and improved ways to stay connected with their customers.

Marsh said the jeans promotion is just one way the bank has improved employee morale while improving the bottom line of so many area nonprofits.

Another way is “Breakfast with Bill,” said Senior Vice President and Chief Operating Officer Jennifer Roxbury. President Marsh meets with eight to ten employees at a time over coffee and eggs, and asks them such thought-provoking questions as “What would you do if you were CEO for the day?”

Roxbury said this dialogue seems to be especially attractive with millennials, who are frequently socially aware and uber-engaged.

“They just want to be heard. They want to make a difference in the world,” Roxbury said.

Many younger employees have given useful advice, like how to make their buildings greener and save money on energy bills, by using motion sensors, and recycling.

With engaged employees, a responsive leadership, an evolving-with-the-times service model and a passion for community service, the bank’s growth has been nothing short of remarkable.

What is the secret to the bank’s success?

Marsh said, “We have a dedicated and wise Board of Directors. We’ve seen the writing on the wall for many years.”

They didn’t need a crystal ball to see the undulating market forces. “We’ve exercised strategies to tap in to economies of scale.” They anticipated the dramatic shrinkage in the number of banks, and decided to utilize economies of scale to save dollars and grow dollars.

They never backed down or slow-walked through any challenge.

Brittany Basham, Assistant Vice President and Manager of Human Resources and Organizational Development, said the bank’s secret is simply, “We have the right people in the right places.”

Noting that she has worked for only community banks–not “the big banks”–in her 11 years in the field, she said, “We offer unique quality products and services with a personal touch.”

“Community banks encourage small businesses to start up and dream big.” She is enthusiastic about having a court-side seat to that dream fulfillment.

“We have an energized senior management team,” Basham said.

As a twentysomething who rose through the ranks faster than Baryshnikov at an introductory dance class, she said she knows many high school and college students automatically cross banking off their career-possibility list because they instantaneously equate banking with numbers. They think, “I’m bad at math.”

But she is committed to educating young people to the fact that banking is so much more than math. There is IT, HR, marketing and more.

“I say this all the time: ‘I can teach banking, but I cannot teach (young people) how to have a positive attitude and be a real go-getter, someone who wants to learn and grow.’” At Farmers, they have go-getters galore.

Marsh said that in periods of acquisition and expansion, the staff has been so supportive. He has often had to ask senior and mid-level managers if they could work overtime to integrate a new acquisition. They always rise to the challenge.

Roxbury said there is no one, true secret to their success. Having been in community banking for 29 years, and with Farmers National for five years, she said, “We are blessed with a motivated, young executive team who is really interested in growth—and profitable growth. And it sounds like such a cliché, but we do it all with a community mindset.”

The bank ventures into small markets where other banks won’t go, Roxbury said. In four of their locations, Roxbury pointed out, they are the only bank in town. In contrast, Pittsburgh-area Cranberry Township has 17 other banks within a short drive, so customer choices abound.

Roxbury said, the difference-maker for her bank is that they remain “a handshake type of business,” even though regulations now require a yardstick-high pile of paperwork in addition to that handshake.

Not only regulation, but industry consolidations are the two factors that strain banks like hers, she said.

Audrey Rattay, Director of Marketing and Assistant Vice President, said the bank’s brand is “relationship” banking, with a heavy emphasis on relationships. “We are always hitting close to home with our employees, and we understand our customer and their wants and needs.”

“Being involved in the community is also part of our brand,” she said. “Having your face out there outside of work is essential,” Rattay said.

That involvement begins at the very top, with President Marsh. Active in the PACB and PA Bankers Association, Marsh is a CPA who started at Farmers National as CFO and is also on the board of Federal Home Loan Bank of Pittsburgh.

A graduate of Clarion University, he was also a bank auditor at KPMG out of Pittsburgh, and past chair of the Board of Directors for PA Bankers.

He said his favorite thing about the bank is “the blend of traditional and deep-seated community roots, balanced with progressive growth and customers’ needs in modern times.”

With the new Trump team, Marsh is already seeing moves to chip away at the dreaded Dodd-Frank regulatory Frankenstein, but Marsh is undaunted by Dodd-Frank and the changes.

“Bring it on,” he said. “We will just do what we have to do, to do the right thing for the customers we serve.”

Despite its name’s reflection of the area’s deep agricultural roots, Farmers National Bank has been able to re-invent itself and remain competitive in an increasingly urban market.

Marsh said the bank actually does very little agricultural work. Some of their branches are in very rural areas, however, with four bank branches operating as the only bank in town, Marsh said. Often, the bank was the first bank in town.

Much of their corporate footprint extends to the Pittsburgh area, which has repeatedly reinvented itself as expertly as Farmers National.

Marsh sees the need to consolidate as a natural outgrowth of market forces that demand savings by utilizing economies of scale. And admitting they have often taken “a touch aggressive” stance in the market, he said, “We’d rather be the acquirer than the acquiree.”

But when it comes to dealing with customers, aggression is nowhere in sight, and gratitude, compassion and personal concern are the rule of the day. Roxbury said her favorite thing about the bank is “our executive team is very much involved in our customer base.”

Marsh sends personal thank-you letters to customers and personally attends numerous networking events. “We are represented on almost every board. We are at every parade and every volunteer opportunity we can, from the executive team to our tellers,” Roxbury said.

“There is an expectation of community giveback,” Roxbury said. For some senior-level managers, it is a requirement. For all, it is encouraged.

Roxbury herself is an impressive community servant-leader. She just fulfilled two and a half terms as the leader of the United Way. She is now active in the American Heart Association, is Group 8 chairwoman for the PA Bankers Association, and serves on a Butler nonprofit development corporation for affordable lease space and employment and funding opportunities.

“Every year, we survey our employees to see what they are involved in. I get pages and pages of documents,” from each employee, Roxbury said. From Girls Scouts, to church, to school PTA, and even an employee who started his own nonprofit, their hands and hearts are building their community.

“It’s really a cool thing,” Roxbury said.

When the bank enters a new market, such as their entry into Aspinwall in August, they donate to local communities. At Aspinwall, police officers, fire fighters, and the borough manager pulled them aside at a welcome reception and told them of the impact they are having by merely paying attention to their markets, such as their collection of toys donated to Aspinwall’s Presents from Police.

“People don’t believe the bank is doing that kind of thing. Not that other banks don’t, but our level is certainly not what they expect,” Roxbury said.

Farmers National Bank of Emlenton branch opening

History in the Making

Since its birth in 1900, the bank’s growth has been jet-propelled in recent years.

In 1989, Emclaire Financial Corp holding company was formed. In 1991, they bought offices in East Brady and Emlenton from Mellon Bank.

In 1996, they bought the Knox office from Mellon, and also opened an office in Bon Aire.

In 1998, they acquired Peoples Savings Bank and its three offices in Ridgway, Du Bois, and Brockville.

In 2006, the Cranberry (Venango County) office opened.

In 2008, the Grove City office opened.

In 2009, bank leaders bought their Titusville office from PNC/National City.

In 2013 the St. Marys office opened followed by the construction of the Cranberry Township office which took place in 2014.

In 2016, they acquired United American Savings Bank in South Side, Pittsburgh, and opened the Aspinwall office.

Marsh said they take a “three-stooled approach” to their growth spurt. The first leg is organic growth; the second, acquisitions; and the third, the opening of de novo offices from scratch.

Marsh became CEO in 2009 and has doubled the assets of the bank during his remarkable eight-year tenure, with assets leaping from $350 million to $700 million.

The bank has had three key acquisitions during his tenure, although Marsh humbly confesses that one acquisition was not that large.

They bought United American Savings Bank of Pittsburgh in April 2016.

In 2013, they opened the St. Mary’s office. In 2014, they opened the new office in Cranberry.

In building out its branch network and its corporate lending side, with a team of six lenders serving 17 branches, Marsh said their business model is geared to being 50 percent consumer and 50 percent business loans.

Even with the ever-accelerating trend toward branchless banking, many people still want face-to-face interaction with tellers and the peace of mind of having a branch down the street, on their way to and from work, Marsh said.

It’s a far cry from the days when some people went into the bank every day, with its plush-pile carpeting, queues of teller windows, bowls of lollipops, and passbooks and coin keepers.

In keeping with its 2017 strategic plan, according to Rattay, the bank has been able to evolve and offer new products and services, such as mobile banking with mobile deposit, to their already established eBanking platforms.

They have been able to mix traditional and face-to-face banking with advanced technology for millennials.

They unveiled a new website in 2016, and this year, a new online banking platform.

Farmers National Bank of Emlenton breakfast with Bill

Cultivating the Next Generation of Leaders

Roxbury noted that the bank has offered in-house leadership training since 2015, to back-fill leaders who are ready to step in and succeed when needed.

They are training everyone from part-time tellers to executive management.

Roxbury said since late 2015, four people have been in the management program, which spans 12 to 18 months. Members rotate through the entire organization. For four weeks, they work in every department.

“They don’t just shadow, they actually do the work,” Roxbury said. They go on business calls with lenders and do analyses in the credit department. After completing the training, employees are guaranteed a mid-level management role. Two have already graduated and two soon will. Two more are just entering the program.

The bank also offers quarterly training on how other departments work as well as new and refresher courses on processes.

Basham is a leader in the management employee training.

She was also featured in a PA Bankers video designed to help attract millennials to the field of banking. The bubbly blonde talked, unscripted, about why she loves her job, and why other young people should consider a foray into the field as well.

Basham, 29, has been in community banking since she graduated high school 11 years ago. She has been at Farmers National for four years, starting her career as a teller at another community bank. She knew as soon as she enrolled in teller training that this was the job for her.

She is now on the “Emerging Leader Advisory Board” at PA Bankers and was one of seven selected to do that popular video.

Even external candidates can be part of the management training program, Basham said.

One trainee was sure he wanted to be a branch manager, but he found a new interest and a perfect match in a credit analyst post.

“We are committed to placing them in a mid-level manager position,” Basham said. “It creates the kind of bench strength we need.”

Employees receive monthly coaching sessions, weekly evaluations with Basham, and supervisor evaluations as well.

The bank offers quarterly courses also, in about 20 different topics, such as leadership, business etiquette and time management.

Despite the perception by many that millennials view banking as the “Evil Empire” ever since the 2008 financial collapse, Roxbury pointed out that they have many millennials in leadership levels–and as customers. As someone who likes to remind her fellow Generation X-ers, and Y-ers that, “We raised them!” she aims to understand Millennials as they are both future employees and customers.

Especially attractive to millennials, “We have an open-door policy all the way to the CEO,” Roxbury emphasized.

Farmers National Bank of Emlenton Christmas stockings for the Troops

Community Service

While the bank is active in personal and commercial lending and savings, its best work is not behind the counter, desk or cubicle wall; it is in the community. As both an organization and as individuals, they give back to the community like a bottomless ATM.

Marsh said the bank is heavily involved in the Pennsylvania Educational Improvement Tax Credit (EITC) program, to which they have donated about $135,000 a year for scholarships to children in need.

They sponsor the Autumn Leaf Festival in Clarion, which features a car cruise-in, live music, bingo, karaoke, a scholarship pageant, and more, along with numerous other festivals and parades. They lead and participate in fundraising campaigns for the charities in the United Way of Venango County, and of Clarion County, and give many donations to an array of nonprofits.

Basham said when employees are first hired, one of the first items they receive from the bank is a community T-shirt, which can often be spotted on an employee on Saturdays and Sundays somewhere in the community, ladling out soup at a soup kitchen, powerwalking through a cancer walk, or swinging a hammer for an affordable housing project.

“We don’t just talk about it. We actually do it,” Basham said.

Donations often coincide with bank milestones. The bank celebrated the 10th anniversary of its Cranberry office by donating $1,000 to 10 different organizations, which included several fire departments, a cancer foundation, child development centers, a sports booster club, the Salvation Army, the Humane Society, and an area Lions Club.

Earlier, the bank donated $1,000 to help the Foxburg Free Library launch a service program that lends, not the typical books and videotapes, but household appliances such as sewing machines and bakeware, along with video games and board games.

For sports enthusiasts–and ultimately for the benefit of all taxpayers in the school district–they donated $38,000 to Titusville Area School District for a scoreboard for the high school football field.

Late in January of this year, the bank gave a $3,500 donation to the Seneca Valley Foundation for classes at Seneca Valley School, for a “women in engineering” class, an “honors engineering” class for both men and women, and college-level accounting classes.

Their giving begets more giving. By maximizing customer service, they grow profits for shareholders, and thus have the means and the opportunity to make an even more profound and positive impact in and for the communities they serve.

“This bank is everything I would want in a bank if I was creating my own bank,” Roxbury said. “Our leadership, our board, and our employees—we are all focused and pointed in the same direction. We are a train in motion…we are all on the same strategic mission and that’s what makes it work.”

Basham said her favorite thing about the bank is, “We do the same things as larger banks but with fewer people, so we can provide the same level of service, but the relationships we build leave a lasting impression.”

Like its name, The Farmers National Bank has planted, labored, adapted and grown to remain a strong bank of choice. They employ, grow, nourish, produce, cultivate and invest.

They represent the best of our rich past and the brightest hope for the future.

Year after year, they plant their fields, work sunup to sundown with a single-minded purpose, harvest their yield, and grow good things. From dress-down days to memories of hometown parades and family togetherness, they are happy to see they are reaping what they sow.

This community bank profile can be found featured in the March 2017 issue of Transactions. Would you like to receive a physical copy of the magazine each month? If so, please contact PACB today!

Farmers National Bank of Emlenton staff