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Banking on personal service
Farmers State Bank nears the century mark

photo of Farmers State BankFarmers State Bank
The state's third smallest bank, Farmers State Bank in Winthrop, is run by people with a banking bug coursing through their bloodlines.

And at a time when banks and bankers are in bad odor throughout the land, Farmers State has maintained enviable ratings for financial soundness as well as its nearly century-long tradition of personal service.

"We survive because we are family owned. If this was an investor owned bank, we wouldn't be here," says bank president Edward L. Adams Jr., 67. The bank has assets of $25 million and until recently long held the distinction of being the state's smallest bank. (Farmington State Bank is now the smallest.)

Farmers State Bank escaped the fallout from the recent banking crisis by sticking to conservative banking principles, its officers say. In fact, they add, it actually profited from the crisis when depositors moved their savings to the bank from others perceived to be less secure.

Farmers State eschews mortgage loans because they are too costly for it to process, so it wasn't at risk when the mortgage market collapsed. It's in the smaller, bread-and-butter loan business - a "niche" market that makes auto and small business loans and the type of personal loans that other banks typically ask customers to carry on their credit cards, says chief financial officer Beaumont (Beau) Buell Adams, 35.

Farmers State offers no credit cards, but it does issue a debit card that's good all across the nation and internationally. It has no ATM machine, either, says the younger Adams, mostly because of space restrictions in the 1915-era building.

photo of Beau and Ed Farmers State Bank president Edward L. Adams Jr., left, and chief financial officer Beau Buell Adams. - Photo by Solveig Torvik

"We are successful if the community is successful," says Beau's father, who explains that the bank has grown "organically" and slowly as the valley itself has grown. It doesn't do much marketing and tries to distance itself from Wall Street shenanigans. "We try to keep a low profile," he adds.

With seven employees, Farmers State has a top, five-star rating from Bauer Financial, a rating reserved for banks that have twice the capital required by regulators. Every 18 months, state or federal auditors show up and comb through the bank's books to ensure compliance with sound banking practices, say its officers.

Beau Buell Adams is a fourth-generation banker and the third generation in the family involved in running Farmers State Bank, which he does from behind his grandfather Frank L. Buell II's desk in an office festooned with Buell II's oil paintings. Also prominently displayed is an antique rifle issued to Adams' great-grandfather, Frank L. Buell Sr., in the 1870s by the Minnesota National Guard. The only thing that's changed in the office since his grandfather's day is the addition of a computer, says Adams. From an oil portrait on the wall in the outer office Buell II, who was president of the Washington Bankers Association, still keeps a watchful eye over the business.

"We still have the same principles of lending my grandfather had," Adams says. "For us the most satisfying thing is to solve a customer's problem."

photo of Frank L. Buell IIFarmers State Bank former president Frank L. Buell II. - Photo by Solveig Torvik
It all seems to have started with Beau's great-grandfather, Frank L. Buell Sr., a Minnesota banker who lost half -a-dozen banks in a crash in the late 1800s. He moved on to Spokane, where his son, Frank L. Buell II, got his start in banking at the Federal Reserve and later was a vice president at Seattle First National Bank.

There Buell II's duties included scouting out banks for Seattle First National to acquire. When he first came across Farmers State, it was run by George Dibble and deemed too small to bother with, the story goes. But Buell II remembered the bank, and when he had a heart attack at age 56, he made plans for retirement that included buying a majority interest in Farmers State, which he did in 1964. In 1967, he and his wife, Ann, moved to Winthrop so he could run the bank. Buell II died in 1993.

Georgia Adams, daughter of Ann and Frank, married a man who also had been a vice president at Seattle First National Bank, Ed Adams. He came to Winthrop to run the bank whenever his in-laws were away on vacation. In 1985, Ed and Georgia moved to Winthrop with Beau, then a second-grader.

photo of young BeauPhoto courtesy of Methow Valley News

At the age of 10, Beau began his banking career as the state's youngest bank messenger under the tutelage of his father and grandfather. "I got to work with both of them," he says, smiling at the memory. He always expected to become a banker. "I enjoyed it so much as a kid," he says. "It didn't occur to me to do anything else. Everything in banking was in my comfort zone."

After graduation from Washington State University, Beau worked at Cashmere Valley Bank as its card services manager until he was asked to come home to help run the family business. "The first thing I did was get a debit card. Then we added a website and online banking," he says. Next is an online bill paying system, he adds, noting that such technological improvements are more costly for small banks to absorb than for larger ones.

Even though the bank is adding technology to make banking easier for customers who want that convenience, the emphasis is still on the one-on-one personal contact that has always been the hallmark of Farmers State, he adds. The legendary unsecured "handshake" loans are still to be had, but regulators have made them a little more burdensome to process, the two men say.

Complying with government banking regulations is a more time consuming burden for small banks, they add, and that's the biggest single challenge for owners of small banks. The elder Adams says that in the wake of the financial meltdown, laws passed by Congress became too complex and burdensome. "At the same time, I can't stand up and say we shouldn't have it," he says of the new regulatory regime. There was too little enforcement on banks before the recession and Congress responded with what seems like over-kill, he says. But he adds that he expects the swing between over and under regulation to settle down with time.

Both men are members of the bank's board of directors. Terry Karro is chair of the board, and the other two members are Georgia Adams and David Powell.

Farmers State Bank was founded in 1915 by a group of local families who owned it until Buell bought the majority interest. The bank has always been in its present location at 159 Riverside Ave., and in the mining era, gold from the nearby mountains found its way into the bank's safe. In early days the bank shared the building with a furniture store and a mortuary. Lore has it that an apparent bloodstain on the floor of the bank's storeroom dates back to the building's mortuary days. The bank's most dramatic moment came in 1926, when an enterprising bank robber used a mattress from the adjoining furniture store to muffle the sound of explosives used to blow open the bank's safe.

Farmer State Bank claims a distinction well worthy of note: long before the present owners bought it, the bank survived the Great Depression. "They must have been doing something right," says Beau.

Thanks to more of the same during financial vicissitudes of ensuing decades, this tiny, steady-as-she-goes bank is poised two years from now to mark an occasion few banks of any size survive to celebrate: its 100th birthday.


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