Business Spotlight: Banking on the Future

Century banks are common in Missouri.

Nearly half of the roughly 300 bank charters in the state are 100 years old or more, according to the Missouri Bankers Association. For 1906-founded  Ozark Bank, the century mark is in its rearview mirror, and the founding family remains front and center.

Chairman and CEO Fred Hedgpeth was born into the business, much like the relatives who came before and after him – including his daughter, Katie Hedgpeth-Baker.

His first bank memories are of joining his mother, Chlorene, to clean the branch on Ozark’s square and dust the marble baseboards following a remodel in the early 1960s. Hedgpeth, the 60-year-old grandson of bank co-founder Dr. D.F. Hedgpeth, almost didn’t follow the family line, but it was fate.

“I really enjoyed being outside. I have an interest in agriculture and farming,” he says of his background in raising steer and hay. “I knew I’d go into the bank at some point.”

That point was at the age of 22, just after finishing college at Drury University and taking a bookkeeping job. He moved to the teller line and later into the loan department on his way to over three decades of work.

Today, he and his sister, Vice Chairwoman Laura Haseltine, and his daughter are the remaining family members working.

Only a small percentage of the 146 Missouri banks in business for over a century are still owned by the founding family, says Max Cook, president and CEO of the state bankers’ association. He cites two others in southwest Missouri: the Harlin family’s Century Bank of the Ozarks and the Gohn West Plains Bank.

The federal government’s well-intentioned regulations coming out of the recession could further limit the continuation of family-owned banks. Cook says mergers and acquisitions are becoming more frequent.

“We’re seeing bankers needing to find those efficiencies that are driven by some size,” he says. “With all the new regulations imposed on the banking industry, it’s making it harder and harder on the community banks. In this day and time, I think people believe you’ve got to get up in that $150-$200 million range or better. That’s not to say you can’t do it less than that.”

Based in Christian County, Ozark Bank held assets of $189.9 million through the second quarter, according to the Federal Deposit Insurance Corp. In terms of deposits, the bank is tops in the county, with $155.6 million, representing 17.7 percent of the market, according to FDIC data as of June 30, 2013.

Hedgpeth says assets are up 7 percent compared to August 2013. With net income last year of $1 million, bank officials say profits are up 40 percent at the halfway point this year to $733,000.

“Loan growth is where we’ve focused our attention the last two to three years, and finally we’re seeing our efforts pay off,” he says of the lending activity up 12.75 percent from December.

On the go
Bank officials are cognizant of the future and that means technology.

In recent years, Ozark Bank added mobile banking and deposits, personalized debit cards, document imaging and network security. John Darrow, senior vice president of information technology, says development of a debit card alert app is among the tens of thousands of dollars invested each year in technology.

In partnership with Iowa-based Shazam, the mobile app launched this year sends an alert to customers when debit purchases go above a set amount.

“In light of all the recent security concerns with debit cards, customers can put in a threshold,” Darrow says. “If my debit card is used for a transaction over $200, I want to have an alert sent to my phone as soon as that happens. We can kind of keep tabs on the accounts a little better and watch out for fraud.”

With about 60 employees, Ozark Bank operates four brick-and-mortar branches: three in Ozark and another in Nixa. The newest branch was added in 2004 on State Highway NN in north Ozark, and Hedgpeth says lending activity is growing in Greene County to now encompass 40 percent of loans.

“There’s been some discussion about a Springfield location,” he says.

Four generations
Katie Hedgpeth-Baker represents the fourth generation in the family. She, too, almost took a different career track, but her DNA said otherwise.

“I never saw myself in banking, although I think it was a natural fit,” says Hedgpeth-Baker, who handles marketing and communications for the bank.

“I’ve always respected and admired my family in what they’ve done – how much they’ve cared about the bank and the community.”

Before starting work as a teller, she recalls regular trips to the bank immediately after school.

“Dad would want to know how we did in school that day. Mom would march all four of us kids in to see Dad, and my late uncle was there,” she says. “That’s where some of my fondest memories were made.”

Hedgpeth-Baker’s uncle, Dan, served as an executive officer for over 30 years before he died five years ago at the age of 57. Fred and Dan’s grandfather was an original investor in the bank and, in the early days, ran his medical practice in a back room.

Fred Hedgpeth has served as board chairman the last five years – and he’s not dropped that affinity for the farm life. He maintains a cow-calf operation on 240 acres a mile west of Ozark.

“It’s my retreat,” he says. “I love it.”[[In-content Ad]]