Commerce hits century mark in Springfield market

It has been a slow but steady 100 years of growth for Commerce Bank in Springfield just the way its co-founder and leader, "Uncle Tom" Watkins Sr., would have wanted it.

The bank has come a long way since Watkins and Springfield's prominent McDaniel family founded it Sept. 20, 1902. Established as The Citizens Bank at 220 E. Commercial St., with $25,000 in assets and one employee, in 2001 Commerce reported local assets of $1.08 billion and 290 employees in the Springfield region.

But the bank's growth has been methodical, strategic and with a community-oriented mindset, company executives say, matching the philosophy of the Kansas City financial institution, founded in 1865, that purchased the local organization in 1967. Citizens Bank took the Commerce name in 1972.

If the banking industry is compared to the race between the tortoise and the hare, Commerce executives are pleased to claim the role of the slower-moving species, using a long-term, forward-thinking approach.

"It's not who can go the fastest or grow the most, but rather who can repeatedly do the right things over a long period of time. That defines who the winner is," said Chairman John Himmel, who has been with Commerce for nearly 30 years.

That's not to say, however, that the bank hasn't adapted to the ever-changing industry. The banking evolution includes additional technology, services and a changing competitive marketplace.

The tech age

For years, paydays meant long lines in The Citizens Bank lobby on Commercial Street, mostly filled by Frisco Railroad workers in the early days. For many customers, said President Bob Hammerschmidt, it was something of a social event.

That slowley began to change in 1961, when Citizens Bank moved to 1661 Boonville Ave. and added Springfield's first drive-up window. Followed by the advent of automated teller machines in 1979 and online banking in 1996, bank lobbies became less attractive. Now, only 12 percent of the bank's transactions take place in the lobby, according to Himmel.

"Today, people want to stay out of the lobbies," Hammerschmidt said. "It's really a changing, evolving demand of our customers."

The demand has led Commerce to spend two or three times more on technology than it spends on brick and mortar, Hammerschmidt added.

The latest technology serves as a benefit to businesses' payment schedules, Himmel said. More timely and complete information reporting of payment systems is gathered and delivered via new technology, called the Electronic Data Interchange. It attaches detailed electronic documents to electronic cash.

"Business decisions are made on information," he said. "And the more complete, the more timely you can get the information, the better business decision a corporate manager can make."

Changing landscape

In a Springfield banking landscape that has been hit by mergers and start-up banks, Commerce has weathered the blitz. Despite the mergers that changed one-time market share leaders Boatmen's Bank to Bank of America and Mercantile Bank to US Bank, and the five recent start-up banks, Commerce sits atop the market share leader board with a 16.06 percent rating in Greene County, according to the most recent Federal Deposit Insurance Corporation report dated June 30, 2001.

"Clearly, the new banks are here because they see opportunity," Himmel said of Liberty Bank, Old Missouri National Bank, Signature Bank, The Bank and Village Bank. "And I think that's a good thing because it speaks well for our market."

As the vibrant market shuffled the competitors, Commerce rose to the top spot in the Greene County market, where it has remained since 1999. It ranked second in the market for the five years prior.

New services

As Commerce grew with the banking industry, so did its services.

In the early 1900s, banks weren't much more than deposit and loan organizations. Over time, services have expanded to include several kinds of loans, brokerage, insurance products, credit cards and wealth management.

Himmel said that nearly 40 percent of Commerce's total income comes from the new banking services, whereas 100 years ago banks relied on traditional loans and net interest income for 99 percent of total income. Net interest income is defined as the difference between what is paid depositors and what is loaned or invested in government securities.

The added incomes have paid off and Commerce boasts $12.9 billion in company-wide assets as of Dec. 2001. Himmel said the sectors leading the bank have been retail, commercial and asset management.

Just a milestone

In the race of tortoise versus hare, the finish line for Commerce is not this 100-year mark, Hammerschmidt said.

"I see it as a milestone we wave at as we pass by. It's certainly not a predictor of future success," Hammerschmidt said. "You can enjoy where you are, but that doesn't give you anything tomorrow because the market is changing, customer needs are changing and we have to be able to react to it."