Naperville business leaders opening their own bank

Naperville business leaders opening their own bank

Naperville businesses will have a new banking option as early as this June, says a group of 20 community leaders.

Frustrated with what they consider a lack of true community banking options in Naperville, these men and women are putting their money where their mouths are by creating the First Community Bank of Naperville (FCB Naperville).

The new bank will open this summer at a temporary location at 2728 W. 75th St., just east of Ill. Rte. 59, on Naperville’s west side. And, while awaiting its charter, it will function initially as a branch of the First Community Bank of Joliet, whose president, Stephen Morrissette, is one of the founding directors in Naperville.

Ray Kinney, one of the bank’s founders and president/co-owner of MinuteMan Press and co-owner of the Maclyn Group, believes that as banks have consolidated, many formerly local banks have essentially become order-taking offices for big, out-of-state banks.

Kinney believes this hurts the local community, and he and his colleagues want to offer an alternative.

“We’ve found that the guys that know us, our local bankers, aren’t really making the decisions,” he said. “So we’re trying to create a bank that allows businesses locally to grow and to have good relationships with their bank, that knows who they are and what they stand for in the community.”

The process to obtain a new bank charter is complex and can take up to two years, but Scott Wehrli, chairman of the Board of FCB Naperville and a partner in DuKane PreCast Inc., has some experience in it.

Wehrli was one of the organizers of First Community Bank of Plainfield, which will begin operating under its new charter this summer. During the start-up phase of that bank, Wehrli and other founding directors struck gold when they began talking to people at First Community Bank of Joliet.

Morrissette admits he is passionate about community banking and regularly counsels other groups on the start-up process. But when he and his colleagues met with the Plainfield group, they recognized a unique opportunity to help Wehrli’s group bring their banking services to the market even while the bank charter application process was underway.

In this novel arrangement, FCB Plainfield opened its doors in November 2006 as a wholly owned branch of FCB Joliet. The Illinois Department of Financial and Professional Regulation and the Federal Reserve Bank have just approved Plainfield’s charter, and the Federal Deposit Insurance Corporation (FDIC) has approved its insurance policy, so this summer FCB Plainfield will begin operating on its own. FCB Joliet will remain an investor but no longer have ownership in the bank.

FCB Joliet has since used this arrangement with community banks in Homewood-Lockport, Burr Ridge, and now in Naperville.

This June, FCB Naperville will begin operating as a branch of FCB Joliet. Upon approval of its charter and FDIC policy, FCB Joliet will step out of the picture.

Wehrli expects this to happen in about 12 months. At that time, FCB Naperville will sell a limited number of shares of stock in the bank to the public.

“Our vision of a community bank is one that’s not going to be owned just by us, but by lots and lots of people in the community,” he said.

The response to the proposed bank by Naperville’s business community has been solid since Wehrli first began floating the idea of the bank with other Naperville business leaders in 2006.

Word spread and gradually involved people from many circles of influence, from Edward Health Care Services Corporation’s Pam Davis, to Jackson Moving & Storage chairman Brad McGuire, to James Bergeron, owner and operator of the restaurant group Tessa’s Enterprises, among others.

This initial group of 20 businessmen and women will serve not only as the bank’s board of directors but also as investors. Additionally, almost a dozen people have invested but will not participate actively in the management of the bank. According to Wehrli, FCB Naperville will open with between $15 million to $20 million in capital.

The bank’s core staff, all experienced bankers and Naperville residents with strong business ties to the city, are also investors. Pat Benton, formerly of Harris Bank, is the bank’s president and Loretta Karkhoff, formerly of MidAmerica Bank, is vice president. Both are also past presidents of the Naperville Area Chamber of Commerce.

Kinney believes these community and business ties are crucial to the bank’s success.

“The key to the whole thing is great people,” he said. “Our employees are accountable, because they have financially vested an interest in the success of how we’re doing this and why we’re doing this.”

William C. Gooch, Jr., chairman of the board of directors of the Community Bank of Elmhurst, agrees with Kinney’s assessment.

“Local ownership is the key to their success,” he said.

Gooch should know; he helped found CB Elmhurst in 1964 and has been involved with the start up of community banks in Oak Brook, Wheaton, and St. Charles.

“There is always a need for a well-run true community bank, but with the number of expansions of other banks, it’s getting harder to enter the field,” he said. “As long as (FCB Naperville’s founders) go about this with a true community spirit, they will do fine.”

Debbie Jemison, a spokesperson for the Illinois Banker’s Association, concurs.

“Each bank services a different niche businesses, and the market dictates the types and numbers of banks in the industry. But there will always be a market for all types of banks in Illinois.”

Kinney said that while the bank’s core focus will be servicing small- to medium-sized Naperville businesses, the bank will also offer personal banking services. As for location, the temporary bank office will open as soon as the build-out is finished and it has its permit of occupancy.

But directors are still searching for a permanent site, which might entail a new building with space for additional businesses to operate. And although they’re not looking to put a branch on every corner, given the geographic size of Naperville, a handful of future branches might be in their future.

Beth Carter, Contributing Writer

Posted on Tuesday, May 27, 2008 (Archive on Tuesday, June 03, 2008)
Posted by jstoltz Contributed by jstoltz

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