Bank’s centennial gives special feeling to Kearns family

Bank’s centennial gives special feeling to Kearns family

Olmsted, Monte

The 100-year-old banking legacy of J.P. Kearns continues in a small Montana town on the edge of the Rocky Mountains as his grandson now oversees an institution that weathered tough times and rolled with the changes in the modem world.

The State Bank of Townsend in Townsend, Mont., recently marked its centennial under the helm of 61-year-old James W. “Bill” Kearns Jr., the bank’s chairman who remembers his bank-founding grandfather as cigar-smoker with a proficiency for blowing smoke rings. His forefather also was a man of integrity with a conservative bent toward banking.

“As a young kid, he was very kind to me. You get spoiled rotten by your grandparents,” Kearns said of his grandfather who worked for 51 years at the bank in Townsend, just 35 miles southeast of the state capital of Helena.

In June, the $26 million institution celebrated its birthday with an open house as old bank records and early pictures were on display for more than 400 people including U.S. Rep. Rick Hill. That day, well-wishers got a chance to see the handwritten ledgers from 1899 revealing customer names and the amount of money deposited. They also saw that some 40 people did business on the first day the bank was opened by Kearns’ grandfather, who served as head cashier on June 1, 1899.

A third-generation banker, Bill Kearns is carrying on a bank-loving tradition started by his grandfather and continued by his father, J.W. Kearns Sr., who both worked at the bank most of their lives. J.P. Kearns stayed at The State Bank of Townsend until his death in 1950, while his son, J.W.’s career lasted even longer at 61 years. He died in 1988, a year after retirement.

“The bank was their life pretty much,” Bill Kearns said of his father and grandfather. “They enjoyed it. And when they got to retirement age, they stayed. That’s pretty much what I’m planning to do.”

Since joining the bank in 1961, Bill Kearns has cobbled together plans that changed the way his family’s business viewed banking. As a young, progressive-thinking banker, Kearns found himself at odds with the conservative approach of his grandfather and father. It took time but Bill Kearns oversaw a bank that once had a lobby filled with spittoons for snuff-chewing customers, turning it into an institution more attune to the modem world.

An increased number of student loans, use of computers, automated teller machines and debit cards were ideas and services that he brought and pushed on the bank’s agenda. His father and grandfather could only dream about these things or had little time for them, and under Bill Kearns, the bank went through a metamorphosis.

Kearns’ and his father’s differences in banking philosophies can be best viewed by comparing the bank’s loans-to-deposits ratio. In the early 1960s, when Bill Kearns started working at the bank, the number was an ultra-conservative 10 percent. Today, it’s about 70 percent.

Kearns remembered the difficulty he had convincing his father that making more loans was best for the bank, and ultimately, the community. Because Kearns’ father and grandfather had lived through the Great Depression-a time when many banks closed as economic hardship prevailed-they played it safe.

The elder Kearnses saw that over-generous lending caused many banks to go broke, and in those days, safety and soundness were stressed more than service to the community. The younger Kearns held the view that it was okay to take the occasional risk to help the community.

“We did not have the same philosophy,” said Kearns of his father’s approach. “I thought we had to get out and be aggressive in the community. [My father] came from the old school, and I came from the new school. That put some stress on the father/ son relationship.”

The father-and-son team worked together for 26 years until J.W. Keams’ retirement, which made way for Bill Kearns’ ascendancy to president in 1987.

Although a number of changes have taken place since Bill Kearns became the bank’s visionary, one remnant of the past that largely remains intact is the bank building. When the bank outgrew its original building, the office was moved into a larger brick and sandstone structure with pillars in 1918. This occurred a year after Kearns’ grandfather became president. Today, the building’s early century flavor has been mostly kept alive and still has the iron bars on the teller windows. The building is listed on the National Registry of Historic Places.

The original bank building now houses the Kearns-owned Centennial Insurance Agency, which soon may be merged with the bank’s holding company, SBT Financial Inc. Another change occurred in 1992, when Ted Vanover became president of The State Bank of Townsend, while Bill Kearns remains chairman.

Today, the bank’s board includes Kearns’ brother, David, a retired agent from the Federal Bureau of Investigation. While neither of Kearns’ two children has shown interest in working at the bank, plans are to keep The State Bank of Townsend in the family. “I will probably pass this on to my children,” Kearns said.

Monte Olmsted is associate editor of Northwestern

Financial Review.

Copyright NFR Communications Inc Oct 23, 1999

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