By Bowdeya Tweh, Times of Northwest Indiana
Immigrants to the United States and Americans moving north seeking employment helped build Northwest Indiana's strong work ethic, said David Bochnowski, chairman and chief executive of Peoples Bank's parent NorthWest Indiana Bancorp.
As a third-generation banker, Bochnowski said he's continuing to follow examples set by his grandfather, John Bochnowski, who immigrated from Poland in 1899 and eventually helped found the institution David now leads.
Celebrating the bank's 100th anniversary today, Bochnowski said he aims to continue leading a growing community bank based on the principles of building a rapport with its customer base and reinvesting money into the community where bank employees live and work.
Peoples Bank started in a storefront on Magoun Avenue in East Chicago, but its first permanent site was built near the intersection of 149th Street and Indianapolis Boulevard. One century later, Peoples still has a retail branch across the street from the original location.
In the 1930s, the focus of the bank shifted from only providing deposit accounts to residential lending. Four decades later, Peoples began to bolster its commercial lending portfolio. The bank added a wealth management division in the 1980s in a push tho diversify its income sources.
To offer a growing array of services, Bochnowski said the bank has continued to attract talented employees who all have roots in the community. Peoples employs 190 people.
"We've tried to be the New York Yankees," said Bochnowski, who started at the bank in 1981. "We try to have the best veterans and to have the best young players (on our team)."
Carla Houck, vice president of retail banking, started at Peoples as a teller as a teenager in 1980. Houck has been with the company for about 15 years, but she noticed that even when she didn't work there and remained a customer, she continued to "see the culture of Peoples."
"Customers came first," Houck said. "Employees came first. We were never a one-size-fits all (bank)."
The bank's headquarters moved from East Chicago to Hammond and later to Munster in 1985. Bochnowski said the last move was important in the company's history because bank officials saw Munster as a growing community and an anchor for the business because of the available land. Officials also liked the site's proximity to an interstate highway.
When Peoples had its initial public stock offering in 1984 and became a publicly traded company, Bochnowski said it was important for the company to not lose its roots. At least two family members always have sat on the bank's board of directors.
Peoples has 11 retail locations and is planning to open an additional one later this year in St. John. A groundbreaking is scheduled for the site in March. Bochnowski said the bank would like to open one new location a year going forward, especially if performances in its two newest branches in Gary and Valparaiso continue.
Since the Valparaiso location opened in the middle of 2009, Bochnowski said that bank has taken in $9 million in deposits. He said typically if a bank could get $12 to $13 million in deposits within three years at one branch location, it is doing well.
"There are opportunities for community-based banks to do well," Bochnowski said.
With more than 35 years in the banking industry, Executive Vice President John Diederich said community banks benefit from managing in smaller geographical areas and can be more in tune with the needs of individual customers.
As of Sept. 30, 2009, the bank's assets were $678.3 million, up $13.6 million from Dec. 31, 2008. However, the bank swung to a third-quarter loss of $1.4 million, or 50 cents per share, in the three months ending Sept. 30. The bank had a profit of $1.6 million, 56 cents per share, in the comparable 2008 period.
Bochnowski admitted the difficult economic conditions and new regulatory environment for financial institutions have been a drag on the bank's performance, but he said conditions will improve. Northwest Indiana is coping with the downturn, but he says it was much worse in the 1980s with the contraction of the steel industry.
Some community banks -- including Peoples Bank -- are doing better than others because they didn't originate subprime loans that got many institutions in trouble and didn't depend on high-cost deposits or extensive borrowing to generate revenue, he said.
Houck said while all banks are looking to increase their market share, it's important to grow smart and invest in things such as technology that makes sense for the bank and its customers.
Staying current with changes in technology for banking institutions has helped Peoples retain customers, especially those who are younger, Bochnowski said.
The important thing is to not lose the connection with its customers.
"We've been here for a 100 years and we can be here for another 100 years as long as we can acquire the talent that will provide banking services no matter what form in the future," Bochnowski said.