PRINCETON — It was four months ago — Nov. 2, when Citizens First National Bank’s long-time hometown legacy came to an end.
It was late Friday afternoon, when Citizens was closed by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. The FDIC entered into a purchase and assumption agreement with Heartland Bank and Trust of Bloomington to assume all the deposits of Citizens.
On the following Monday, third-generation, Heartland Bank and Trust Chairman/CEO Fred Drake took time from the busy and hectic transition to speak with the Bureau County Republican.
“This has been a proud community bank,” he said four months ago. “I understand that a rural community has memories. It’s been the same name for over 100 years ... We have been impressed with the staff and many of those who have a lot of longevity with the bank. They are very attentive, friendly and community oriented ... We need these folks to help us run this bank.”
Now, four months have passed, and Drake participated in a one-on-one question and answer interview with the BCR. Following are his responses:
BCR: In general, how would you describe the transition from Citizens to Heartland during the past few months?
Drake: It has been a very busy time for both the local “Citizens group” and our Heartland team. We are one but still having to function separately in many ways. These times of transition will be times we always remember!
BCR: What have been the high points?
Drake: I have to say the most fun has been getting to know the people. Here in Princeton, we have so many long-term folks on the staff; they have made the project a lot easier. Also, many long-time customers, the kind of people our bank deals with regularly, makes me very happy to be involved with this bank.
BCR: What have been the difficult points?
Drake: Because of our role, as the buyer from the FDIC as Receiver, some change is inevitable. When that affects our employees or customers, that is difficult for everyone.
BCR: When it comes to the former Citizens’ branches, has Heartland kept all of those facilities in all of those communities?
Drake: Yes, we continue to operate all these offices.
BCR: Are the staff members at the banks employed by Heartland? Do they have benefits now? How many Citizens’ employees have been retained?
Drake: Our human resources departments both in Princeton and Bloomington have done an amazing job on-boarding 247 employees, entering data into five systems and 285 fields per employee for a total of 250,000 data items. They are also currently working to fill 11 remaining open positions. These employees are Heartland Bank staff with full benefits.
BCR: Has the transition been more or less difficult than what you expected?
Drake: This is the fourth failed bank Heartland has acquired in the past three years, so we expected there would be challenges. In many ways, we have been pleasantly surprised with the transition.
BCR: What would you consider to be opportunities as you look forward?
Drake: We are excited to serve the Illinois Valley area and other locations where Citizens had expanded. These communities are solid, ‘Heartland’ type of towns, and we expect to be a strong local bank, just as Citizens was traditionally.
BCR: What do you think will be your biggest challenges?
Drake: This acquisition has been unique for us in that we are challenging all employees to look at Citizens’ processes and procedures to identify best practices to carry forward. This is a two-way conversation, and as a result, we are not only getting bigger but continually getting better at serving our customers.
BCR: What about the different departments in the bank — lending (commercial/personal), trust, etc.? Anything you’d like to let readers know about how business is progressing.
Drake: Business is good. There was obviously a lot of publicity about Citizens’ regulatory difficulties, which was naturally upsetting. We have been very encouraged, as we have been around to meet customers. The problem bank is gone; Heartland Bank has been strong, well-capitalized and profitable before, during and since the financial crisis.
BCR: Have customers embraced the change from Citizens to Heartland. What do they need to know about the immediate future?
Drake: We have had many kind words from customers in the area. Citizens had a long history, going back to 1865. It was a cross-generational bank. The closing was hurtful to many long-term customers, especially those who owned stock, which is very unfortunate. We will be merging Citizens’ accounts into our processing system in May. Most customers will not need to order checks. There will be a few, which we have already contacted, that we need to assign account numbers. We have had lots of experience converting banks to our system. We are pretty good at it and will try to make it very smooth.
BCR: Any comments about the towns you are serving?
Drake: The communities that Citizens served are very grassroots,Heartland Bank-type of towns, much like the small town where I was raised (El Paso). I have attended a number of the bank’s local community board meetings and have enjoyed the chance to meet people. Citizens had a great tradition of being a bank involved in its communities. Heartland Bank plans to continue that approach!
BCR: How has the acquisition affected the day-to-day business of Heartland as a whole? Have you increased staff, diversified, etc.?
Drake: We have been happy to involve a number of Citizens management team in our plans to integrate and given them leadership positions. We were very pleased to find such good people here because it would have been much harder to consolidate the operations without them.
BCR: Are you happy Heartland took the leap with Citizens?
Drake: I am very happy — it has been a good business move for us. Our team has been energized, and we get to add a new market that fits in well with our present bank organization.
BCR: What does the future hold?
Drake: In a sudden transition like this, the No. 1 goal is to “keep it together,” meaning business as usual for customers The No. 2 goal is to “bring it together” by merging the systems, the staff and the products. The No. 3 goal is to “build it together,” where we focus on building new business and re-establishing the very strong reputation in the community that was traditionally Citizens’ strength.
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