Paducah Bank History
1948 | The Paducah Bank opened for business on January 24, 1948 at 522 Broadway with assets of $100,000, thus becoming the third bank in Paducah.
1955 | Growth continued at such a pace that by mid-1955, the Bank was forced to relocate to a newer and larger facility at 529 Broadway.
1964 | On January 1, 1964, Paducah Bank opened its first branch location, the current Mid-City Banking Center located at 2401 Broadway.
1968 | The official name of our Bank was changed to The Paducah Bank and Trust Company,
reflecting the decision to offer trust services to our many customers.
1973 | In the summer of 1973, a hole was knocked in the bank wall facing Broadway, which created the first walk-up teller position. It was operational during non-traditional weekday hours and Saturday mornings. This service was so well received that, two years later, all Paducah Bank facilities were open for full service each Saturday from 9 a.m. until noon. Saturday banking hours ended in 1986 as customers’ habits were changing and ATMs were
becoming ever more popular.
1976 | Another first Paducah Bank takes pride in is the fact that we were the first bank in Paducah to elect female board members. Frances Hougland and Dolly McNutt (pictured) were elected in January 1976.
1977 | Paducah Bank was among the leaders in the area to invest in new technology known as ATMs. Our first ATMs were installed in late 1977 and early 1978.
1978 | By 1978, the Bank had completely outgrown its Broadway facilities. A committee of Directors was charged with developing and implementing a plan for relocation. That plan culminated on February 14, 1981, when we moved into our present facility located at 555 Jefferson.
1984 | In mid-1984, a newly formed Holding Company, Paducah Bank Shares, Inc., purchased controlling interest in the Bank.
Joe framptom became president of the bank.
1987 | A tremendous milestone was reached when the bank execeeded $100 million in assets!
1991 | In 1991, the Holding Company Board of Directors had the foresight to create a stock plan to give the loyal Paducah Bank employees more than just a place to work. It provided an ownership position in our Bank and an excellent retirement benefit. The Bank’s 401(k) and Employee Stock Ownership Plan (KSOP) has continued to grow and today is one of the larger shareholders.
1995 | In 1995, the Bank installed a state-of- the-art, full-service ATM network at nine locations around McCracken County.
1996 | Paducah Bank converted its entire database from Computer Services, Inc. (CSI) to an in-house system in 1996, thereby creating new technological efficiencies and allowing us to position ourselves for even greater growth. Also in 1996, Paducah Bank added another branch location on the western end of town . . . our West Park Banking Center opened in November 1996.
1999 | 1999 saw the advent of internet banking at paducah bank as well as a refining of our marketing and sales approach.
1997 | Paducah Bank made its first-ever acquisition of another financial institution. The McCracken County assets of Republic Bank and Trust were purchased in November 1997. This purchase allowed us to move our Lone Oak Banking Center to a newer, more accessible location at 2635 Lone Oak Road and reinstate Saturday hours at that location.
At the end of 1997, two of the largest banks in Paducah announced that they were selling to even larger, out-of-state banks; neither sold until 1998. As the only locally-owned financial institution remaining in Paducah, Paducah Bank enriched its product offerings and further developed an attitude of total commitment to our customers. The development of a sales culture was begun, and new directions were taken to reemphasize our commitment to our community.
2001 | Management began to work diligently to position the Company for a Subchapter S election, which was finalized in December 2001. Under the tax code the election allowed the Company to make distributions to its shareholders on a much more favorable tax basis than the former Subchapter C Corporation. The ability to make distributions to shareholders on a tax-favorable basis is attractive to investors, thus encouraging them to retain their investment in the Company, which is a key to the Bank’s strategic goal of remaining an independent, locally-owned Bank. The Bank’s ESOP receives substantial quarterly distributions since it is a substantial shareholder.
As do all companies, Paducah Bank faced the constant challenge of attracting and retaining core customer relationships as well as great employees. Management determined that a new service strategy should be implemented and decided to learn from the best—The Ritz Carlton. CEO Joe Framptom, President Wally Bateman, Director of Marketing Susan Guess, and Director of Human Resources Maurie McGarvey enrolled in The Ritz Carlton Leadership Training program and brought back what they learned. The team felt it was imperative to engage the employees in the process of incorporating The Ritz Carlton information and creating their own service vision.
2002 | As owners, we initiated a new customer service culture in 2002—our Owners’ Commitment. Employees participated in the creation of our 15 Basics designed to put our service behaviors, credo, motto, and vision (to be the premier provider of financial resources) in place. In order to permanently cement this new culture into the organization, “Owners’ Meetings” were created. Every day at 8:30 a.m., every employee at every location attends a five-minute stand-up meeting, including Saturday.
Many residents in our community, banking elsewhere, recognized the higher service level and became eager to move their financial relationship from their existing provider. With the Bank’s growing market share, a site in the Strawberry Hill commercial development was purchased in January 2002 for possible development of a financial center.
During 2002 the management team began an initiative to take the Bank from “good to great.” This concept, as outlined in the book Good to Great by Jim Collins, is consistent with the Bank’s Owners’ Commitment. All employees received a book, and were broken up into discussion groups to talk about the book and how it applies to our culture. Every new employee receives a copy and participates in a reading/discussion group.
2003 | A Good-to-Great Council was formed in November 2003, and immediately put the flywheel in motion to develop and create the Bank’s Core Values. The Bank’s Core Values—People, Moral Soundness, Culture, Independently Owned, and Community Involvement—were presented to the Board of Directors on October 14, 2004.
2005 | In 2005, the Good-to-Great Council was charged with the development of the Bank’s Hedgehog Concept. The process involved meetings with all employees to determine their concept of the three circles described in Good to Great: what can we be the best in the world at, what are we passionate about, and what drives our economic engine. The Hedgehog Concept is a result of the ideas, insights, and understanding in the Bank. The Hedgehog Concept—Attract, Develop, Retain—was presented to the Board of Directors on December 8, 2005.
A tremendous milestone was reached when Paducah Bank exceeded $400 million in assets as of September 30, 2005—$402,643,385. Not only were our assets growing, but our staff was growing in order to provide our customers with premier financial service. Expansion plan discussions continued in internal meetings and board meetings, and in March 2006, the Bank purchased 1.5 acres in Hannan Plaza for the development of a new banking center.
2006 | On March 30, 2006, at an awards ceremony at the Lexington Convention Center, the Bank was voted the #1 Best Place to Work in Kentucky in medium-sized companies. The Kentucky Society for Human Resources Management (SHRM) and the Kentucky Chamber of Commerce sponsored the rankings. The program is a multi-year initiative to motivate companies in the commonwealth to focus, measure, and move their workplace environments toward excellence. The decision was made after an assessment of the Bank’s employee policies and procedures, and the results of a confidential internal employee survey.
So many positive events were happening that a new slogan was formed: WOW! Great place to bank. Great place to work!
With no room to grow at the Main Office, we considered ourselves very fortunate when we were able to acquire a commercial piece of property across the street from our Main Office. Plans were quickly underway to renovate this space into our Operations Center, which housed our deposit and loan operation departments, information technology department, data processing, and phone center. These departments moved into their new facility in November 2006.
2007 | In recognition of 50 years of devoted commitment and service to Paducah Bank and to our community, the Operations Center was dedicated in honor of H. E. “Gene” Katterjohn on January 25, 2007. Mr. Katterjohn was elected to the Board of Directors on June 25, 1957. He served as Chairman of the Board from January 21, 1973 until January 14, 1988.
2008 | The year 2008 exploded with excitement! Our growth in the community created a need to renovate and expand two of our Banking Centers in order to provide more efficient service to our customers. On April 4, 2008, the grand re-opening of our newly renovated and expanded Reidland Banking Center was celebrated with a ribbon-cutting ceremony. The Strawberry Hill area was developing quickly. In 2002, the Bank’s Directors and management had the foresight to purchase 3-acres of land on a prime corner of the development. The plan was to build a 3-story, 15,000 square foot building to replace our small West Park Banking Center, with the Bank occupying the ground floor and leasing the top two floors. On June 16, 2008, our West Park Banking Center was relocated into the brand new facility in Strawberry Hill.
Growth in our Wealth Management department sparked a major renovation for the second floor at the Main Office. The 15,000 square-foot area was totally remodeled to bring the Trust, Private Banking, and Paducah Financial Consultants departments together in order to better serve their shared customers. Human Resources also shared part of the space.
On May 8, 2008, management was elated to announce to our Directors and staff that Paducah Bank was named one of the 35 Top Small Workplaces in North America by The Wall Street Journal and Winning Workplaces! The Wall Street Journal partnered with Winning Workplaces, a nonprofit company whose mission is to help the leaders of small and mid-size organizations create better workplaces. Over 800 companies were selected to submit an application; of those 800, only 400 pursued the laborious process of submitting supportive documentation. One part of the process was to submit a 250-word essay—our challenge was to describe our culture and community involvement in such a way that it would cause them to be excited about our Bank. A team of judges reviewed all the material and named 15 winners who were featured in the October 13 issue of The Wall Street Journal Report on Small Businesses and honored at a Top Small Workplaces Conference and Celebration sponsored by Winning Workplaces on October 14 and 15 in Chicago, IL. It shouldn’t surprise you to learn that Paducah Bank was named one of the top 15 small workplaces in North America! We were the only business in Kentucky and the only bank in the US of A to win this honor. WOW! What a wonderfully historical day for our Bank!
In June 2008, our Bank celebrated its 60th year as a locally-owned community bank by having a party for our employees, customers, and community! The event was held at the Four Rivers Carson Center and the Swingin’ Medallions performed. President Wally Bateman was very familiar with this band. In 1966, the recording of “Double Shot of My Baby’s Love” sent the Swingin’ Medallions to the top of the charts. Although there were many positive events happening with our Bank, including record numbers, 2008 was a very tumultuous time for our country. We endured the worst global financial crisis in a hundred years, as sub-prime mortgages, free lending, and loose regulation led to the downfall of many major financial institutions worldwide. FNMA and FHLMC were taken over by the US Government; Lehman went bankrupt; Bear Stearns collapsed; Merrill Lynch agreed to be taken over by Bank of America; insurer American International Group was propped up by the Federal Reserve Bank; the oldest money market mutual fund collapsed; both Morgan Stanley and Goldman Sachs became banks; Washington Mutual and IndyMac collapsed; Citigroup was bailed out by the FRB; Wachovia was acquired; oil hit a record high, then collapsed as the financial crisis worsened; yields were pushed to zero; stock markets worldwide collapsed; Bernie Madoff was busted for the biggest Ponzi scheme in history ($50B); and the year closed with Chrysler and GM being bailed out by the government. All told, financial firms posted $1 trillion in credit related losses during the year.
Closer to home, our region was somewhat insulated from such events, but nevertheless individual investment portfolios shrunk in value, home values declined, some businesses closed, unemployment inched upward, and most of us suffered through some degree of uncertainty and unrest. Confidence in the very things we believed in for years eroded or disappeared.
As a safe-and-sound, community-owned bank, Paducah Bank was proud to advertise its many strengths: #1 mortgage lender in McCracken County; #1 market share in deposits with over $356 million; the only bank headquartered and chartered in McCracken County; superior IDC CAMEL score of 264 points out of a possible 300 points; top small business lender in Paducah-McCracken County; named #1 best place to work in Kentucky among mid-sized companies in 2006; and recently named one of the top 15 small workplaces in North America by the Wall Street Journal.
2009 | Paducah Bank continued to be honored in 2009. At the 70th Annual Meeting of the Paducah Area Chamber of Commerce in January, the following awards were presented for outstanding accomplishments in 2008: Leadership Alumni of the Year—Wendy Kester; Distinguished Citizen—Bill and Meredith Schroeder (Directors); Business of the Year—Paducah Bank; and Susan Guess was installed as the incoming Chamber Chair. What a fabulously exciting night for Paducah Bank!
U.S. financial markets started the 2009 year under much distress. But after the equity markets bottomed in March, financial stability gradually returned throughout the year. As a result of the Fed Funds rate staying at 0.25% for the entire year, we were able to lower our transaction account interest rates to the lowest level in our Bank’s history. Mortgage rates were historically low, which enabled our secondary mortgage department to close 473 loans ($93 million
for the year), which produced nearly $1.2 million in gains for the year . . . quite an accomplishment in a distressed economy.
In order to attract and retain customers and employees, there must be confidence in the Bank’s ability to thrive and survive over a long period of time. Staff remained tireless in its efforts to assure the safety and soundness of our Bank. We were proud to receive high scores from various government and private entities who study and rate the health of banks. There were no known regulatory problems or pressures, and we did not seek nor did we accept any government assistance of any kind.
In the face of a very difficult financial and banking environment, Paducah Bank was extremely successful during 2009. Bank pre-tax earnings at year-end reached a record level of $10,221,971, an increase of 5.77% over 2008. Our total equity on December 31 was $48,368,925, a significant 17.20% increase above prior year-end. Total asset growth during the year was minimal as we managed to keep our total assets below $500 million for regulatory reporting reasons. We ended the year extremely well positioned to take advantage of the many opportunities ahead for healthy community banks.
2010 | There was much uncertainty about the longer term burden of government regulations and taxes, and most economists predicted little improvement through 2010 and into 2011. In spite of these uncertainties, Paducah Bank set an ambitious net income goal for 2010: 10 in ’10. In March 2010, our total assets increased by $6,655,000, reaching a new all-time high
of $503,366,897. We exceeded budget in all major categories in June. The low-rate housing environment benefited customers who refinanced through the secondary market. The Bank attained record gains in secondary market income of $316,218 over the budget of $50,000 in August.
In July 2010, our Board responded to customer requests for a facility on the Southside of town by approving the purchase of a tract of land for the construction of a new one-story, 3,500-square-foot facility. The estimated completion date was second quarter 2011.
2010 was a year of superlatives. During a period of continued economic stress across the country, our Bank proved to be both resilient and successful. We achieved several records during the year, exceeded our budget, and finished well ahead of our 2009 results. Highlights as of December 31, 2010 include: net assets of $520,134,972 (up 5.22%); total deposits of $420,328,453 (up 9.66%); equity of $53,961,750 (up 11.56%); net income before tax of $11,198,430 (up 9.55%); and stock value of $435 per share (up 14.47%). More importantly, we achieved these results during a year when 157 banks failed across the country and the FDIC’s problem bank list grew to 860 institutions.
Paducah Bank ended 2010 in excellent financial health. We thrived in a troubled industry and
outperformed most of our peers. Our goal was to remain focused on the strength of our capital and reserves, on the quality of our assets, and on the availability of adequate liquidity so that we could fund the growth that would eventually come.
Reflecting on The Last Decade
The decade that just ended, known by many as “the Aughts,” began with a contested Presidential election and fears of a Y2K meltdown. It was driven early-on by a technology boom, a housing boom, and surging consumer spending, but it will likely be remembered as the “Lost Decade” marked by terrorism, two seemingly endless wars, burst bubbles, a severe financial crisis, double-digit unemployment, government intrusion into the private sector, and much personal financial pain as the S & P 500 was down 2.72% during the decade. Unbridled optimism often accompanies the dawn of a new decade, but at the beginning of the “Twenty Teens,” many have a sinking feeling in the midst of continued wars and terrorism, massive increases in federal spending, ballooning federal debt, and raging partisan debates on health care, the environment, national security, global competition, and energy—just to mention a few of the more prominent issues.
We read that banks had been badly battered by ill-advised investments, terrible credit decisions, eroding capital, shrinking or no income, and dramatic decreases in the stock value of their companies. Well, that is not exactly what we experienced at Paducah Bank. Here is what happened to us during “the Aughts:” net assets up 87%; total liabilities up 81%; equity capital up 168%; net income before tax up 235%; total market share up 52%; book value of stock up 239%; appraised value of stock up 192%.
2011 | Realizing that 2010 was an exceptional year, less net income was budgeted for 2011 than we earned in 2010. Yet our Bank continued to strongly perform. As of March 31, 2011, the Bank continued to experience steady growth with total assets of $531,935,821, an increase of 5.68% over the past twelve months. Our market area continued to reflect some of the economic challenges of our national economy as it struggled to move beyond the recessionary period that began in 2008.
Our latest stock value reached $505 per share on June 30, which reflects our superior financial performance and a generally improved market for community bank stocks, at least during the first half of 2011. The value at the end of 2010 was $470, so we enjoyed a nearly 7.5% increase thus far in 2011.
On August 18, 2011, our new 3,500 square foot branch on Paducah’s Southside was officially dedicated. We were glad to be back in a neighborhood that is far different today than when we left it years ago. There were high expectations for growth in that part of the Paducah market due to a convenient location and our WOW! service.
Bank earnings at December 31, 2011, were $10,973,719 which, while below last year’s record, exceeded our budget by $1,582,454. The Bank’s total assets reached a record high of $534,103,825. These amazing results in a challenging economy were achieved through the combined efforts of a dedicated, focused, and motivated team of directors, managers, and employee/owners.
2012 | The year 2012 was predicted to be a year of significant change for Paducah Bank as we prepared for an improving economy, expanding business opportunities, and a continued onslaught of new banking regulations and more stringent oversight.
After 16 years of processing our internal and customer data in-house, we announced on January 4, 2012, that we would rekindle a 30-year relationship with Computer Services, Inc. (CSI), a well-respected bank data processing industry leader located in Paducah. This decision was reached following months of exhaustive research about the best possibilities for our customers and for the Bank. CSI provided management data and support systems that ensured our compliance with the vast array of complex regulations that governed banking and new technologies for enhanced products and services. The conversion to CSI was completed in November 2012 and proved to be beneficial for all.
During the first quarter of 2012, a completely redesigned website was introduced that was much more user-friendly and presented a much better image for the Bank. Our internet banking, electronic bill pay, and mobile banking products would be further enhanced with the move to CSI later in the year. Paducah Bank was named “Best Bank” in the Paducah Sun readers’ poll. We also garnered awards for the Best Teller, Best Lender, Best Magazine, Best Place to Work, and Best Investment Advisor.
As of March 31, 2012, the Holding Company stock value decreased from $505 per share to $480—the first decline since December 2008. Even though our Bank was profitable, the decline
was driven by several factors: the Bank’s projections of lower revenues, and thus lower earnings due to the inordinately low-rate environment and compression of our net interest margin, general economic conditions, lack of predictability in non-interest income sources, and the regional banking market did not trade as high as stock in other regions.
We lost several members of our Paducah Financial Consultants team who decided that they wished to start a venture of their own. It was not unexpected, but some customers followed them, thus reducing our assets under management. Our team of seven was reduced to a team of three. Management adopted a measured and methodical approach designed to continue the excellent care of our own customers and build our business one valuable relationship at a time.
During the past few recessionary years, the Bank continued to have excellent quality of our loan portfolio. Low past due accounts and low charge offs enabled us to minimize contributions to our loan loss reserve thus positively impacting earnings. This was a rather amazing statistic during a time when a majority of banks faced immense loan problems.
We purchased a 1.2 acre tract of land on U.S. 60 in 1993 to accommodate the possible construction of a banking facility. Only an ATM was maintained on this site. Since a new facility was constructed at Strawberry Hill and this property was no longer needed, the property was sold in December 2012 to take advantage of a lower capital gains tax rate. The proceeds were converted into earning assets of the Bank. The gain on this sale was the largest portion of the below-the-line income for 2012 which, of course, was non-recurring.
Total net earnings of the Bank as of December 31, 2012, were $11,111,203, including several non-recurring events that appeared below the line on our income statement (one such item being the sale of the property on U.S. 60). More importantly, our operating income for 2012 was $10,204,023, which resulted from our core banking business, not special events. Assets in the KSOP were $35,942,916 as of December 31, 2012, compared to $33,944,139 as of December 31, 2011.
2013 | Paducah Bank achieved much success during 2012 and was positioned to enter 2013, our 65th anniversary year, in excellent condition. As of March 11, 2013, Paducah Bank officially became a member of the Federal
Reserve System, a change in regulators that had been planned for many months. Our deposits continued to be insured by the Federal Deposit Insurance Corporation (FDIC). Customers saw no change due to this new affiliation with the Fed.
As predicted, 2013 was proving to be a challenging one for us due to the continued slow recovery from the multi-year economic downturn in the U.S. We remained in the midst of an inordinately low and protracted rate environment which continued to squeeze our net interest margin. In addition, growth and expansion in our market were sluggish as individuals and businesses exercised prudent caution during these uncertain economic times. Paducah Bank’s net income through the first five months of the year was slightly ahead of budget, but more downward pressure during the second half of the year was anticipated.
In May, USEC announced their first quarter 2013 results, placing the Paducah Gaseous Diffusion Plant and 1,200 workers in jeopardy. This announcement created a much higher level of uncertainty and concern about the future of our local market. Our single largest employer began layoffs in August. An assessment of the direct impact on Paducah Bank indicated minimal impact; however, the spillover to small-business bank customers who service the plant could become noticeable in the coming months and years. Absent the ability to specifically measure the impact on Paducah Bank, management chose not to provide a specific loan loss reserve, believing that current reserves and accruals were more than adequate to cover any losses from the USEC reduction.
After 19 years of valued and loyal service, Wallace B. Bateman retired as our President and Chief Operating Officer. Assets were $123 million when he started in August 1994, and employees totaled 71. Under his leadership, assets were $533,143,471 as of August 31, 2013, and employees totaled 148—only 17 of the original 71 employees remained. After many months of interviewing potential candidates, the Board approved a new President and Chief Operating Officer on August 8, 2013. Mardie R. Herndon, Jr. began his tenure on August 30, 2013. Mardie brought to us his 22 years of banking experience and provided valuable leadership skills and banking knowledge to our team of bankers.
Joseph H. Framptom remained as Chairman of the Board and Chief Executive Officer. The Bank’s Directors were Wallace B. Bateman, Glenn D. Denton, W. David Denton, Joseph H. Framptom, Mardie R. Herndon, Jr., H. E. Katterjohn, Jr. (advisory), Wally O. Montgomery, Charles W. Ransler, Meredith L. Schroeder, and Shirley K. Walker. Holding Company Directors remained W. David Denton, Joseph H. Framptom, Wally O. Montgomery, and William L. Schroeder.
At the end of 2013, the Bank earned $9,271,978 on a consolidated basis which was a very good year, placing us in the 90th percentile of our peer banks. Though our total assets of $544,049,936 ended below prior year-end, our loans grew and our tier one capital increased nicely from 10.63% to 11.66%. Total risk based capital grew from 18.08% to 18.15%, a very strong ratio well above minimum requirements and another indicator of our financial strength.
2014 | On May 1, 2014, new Directors were elected to our respective Boards. Glenn Denton (pictured left) was elected to our Holding Company Board, and Conner Framptom was elected to our Bank Board. Both bring expertise and experience to the Boards as the Company and Bank continue to plan for the long-term success of our locally owned and community-oriented financial institution.
Our 2014 results reflected a Board and management team who were seriously thinking about the future and our ability to thrive and survive in spite of the forces at work: stagnant growth, a prolonged low rate environment, growing regulations, political gridlock on the national level, turmoil and terrorism internationally, Asia and China, Greece, the Euro, and a local economy that has seen little growth. Thirty years ago there were 14,772 FDIC insured institutions in the U.S. but only 6,589 at the end of the third quarter of 2014. It was very interesting to think about the future for our industry in terms of such numbers and specifically what that might mean for Paducah Bank.
Efforts, energy, and resources were focused on those things we do best—and what we do best is being what we have always been: a community bank. We chose to engage in those things we understand and in those lines of business in which we can excel. 2014 was not particularly exciting or even record-breaking, but it was extremely solid and reflective of a safe, sound, and stable bank ready to meet the challenges and opportunities of the future. It is clearly not our
intention to hang out a “Sold,” “Going Out of Business,” or “Failed” sign and become an FDIC statistic.
2015 | In spite of anxieties, fears, and unknowns locally, nationally, and globally, Paducah Bank enjoyed another fine year during 2015. It may not have been exciting or record setting, but the Bank remained in excellent condition, poised to take advantage of future opportunities. Total market deposits in McCracken County grew 4.44% during 2015, while our Bank’s total deposits grew 4.61%. We maintained our market position and continued to be #1 in market share with 31.15%. Our Bank’s total assets grew 5.73% to a record level of $577,199,193. Paducah Bank was also the only Kentucky bank recognized for the effective use of social media by the Independent Community Bankers of America.
The Bank added several new products and services in 2015 including a new line of checking accounts called “Wow! Perks” which featured the BaZing value-added benefits package. In addition, the Bank joined the Allpoint Network, which meant that our customers would now have access to America’s largest surcharge-free ATM network, with some 55,000 surcharge-free ATMs worldwide.
Smart Cards were introduced which provided debit card and ATM access to teens 13 years and older, while giving parents oversight and control over spending. The cards were also marketed as a great budgeting or travel card option for adults.
After reassessing customer traffic and usage habits at the Southside branch, Bank management made the decision to close the branch lobby and transition the branch to drive-thru only service
effective September 30, 2015.
The year ended on a sad note as the Paducah Bank family mourned the loss of two former leaders. Gene Katterjohn, Chairman of the Board from 1973 to 1988, passed away on September 11, 2015. Then on November 30, 2015, Frank Paxton, Paducah Bank President from 1972 to 1984, passed away.
2016 | 2016 began with the Paducah Bank Shares, Inc. board of directors electing Conner Framptom to serve as a new director on the board. Conner continued to serve on the Bank board of directors as well.
The Bank created a Teen Ambassador program in 2016 in order to learn more about the needs and preferences of students, to expand the Bank’s financial services offerings, and to provide these ambassadors with real-world work experience. Eleven area high school students were selected to represent Paducah Bank as Teen Ambassadors for the inaugural year.
Our 2016 results were very solid, keeping Paducah Bank well within a group of high-performing banks among our peers. We earned $9,938,897 on a consolidated basis, which is 3.38% more than 2015 earnings. Total assets increased to a record $620,253,181, which was 7.35% above prior year end. Our loans increased nicely, especially during the fourth quarter, to a record $432,098,325, an increase of 8.44% over prior year.
2017 | A major focus in 2017 was the expansion of the Paducah Bank brand into a new major market. After much market research and a thorough search for talent across the state, the decision was made to open a loan production office in Louisville and to hire Louisville native Diana Quesada (pictured above) as a Commercial Relationship Manager and Paducah Bank’s Louisville market representative.
On May 13, PBS, Inc. Director Bill Schroeder passed away. Bill was one of the founders of Paducah Bank Shares, Inc., the company which bought Paducah Bank in 1984 to ensure that it would always remain a locally owned community bank.
2018 | In 2018, Paducah Bank named seven area business leaders to serve on its newly formed Community Board. They were Katie Englert, Matt Snow (Chair), Nick Morris, George Wilson, Tara Sawvel (Secretary), Cory Hicks, and Whitney Cruse (Vice Chair). The Community Board meets regularly with Bank leadership to discuss community concerns, give insight into customer service at the bank, help identify potential growth and relationships, and to identify
opportunities for the bank to improve the local economy and serve the community.
January 24, 2018 marked Paducah Bank’s 70th anniversary. The bank celebrated with a day filled with random acts of WOW and an employee flash mob performance at Kirchhoff’s Deli. Employees surprised dozens of local non-profit agencies and bank customers with donations, gifts, and treats. Kirchhoff’s and Etcetera Coffee Shop helped us celebrate by creating a WOW sandwich and a WOW drink for the day.
Our team in Louisville celebrated the grand opening of their new loan production office at 9200 Shelbyville Rd., Suite 101 on September 13, 2018. Members of GLI attended the ribbon cutting event along with numerous Louisville and Paducah community members. Christy Jarboe, Louisville Metro Government Economic Development Manager, presented a welcome proclamation on behalf of the city of Louisville. This is the first location outside McCracken County in the bank’s 70-year history.
The Directors of Paducah Bank Shares, Inc. unanimously elected Dr. James Kyle Turnbo to serve on the Paducah Bank Board of Directors in October 2018. Dr. Turnbo is a successful medical professional and entrepreneur who shares Paducah Bank’s passion for serving our communities. His energy, unique perspective, and expertise in diverse areas are an asset to our Board. He is the CEO and owner of HealthWorks Medical.
Also in 2018, the decision was made to replace our aging ATM fleet with state-of-the-art ITMs (Interactive Teller Machines) as part of our ongoing focus on leveraging new technology and tools to enhance the way we engage with clients. The ITMs provide all the features of an ATM plus the ability to interact with Interactive Relationship Bankers (IRBs) in real time. This enhancement to the old ATM technology now allows the customer to complete almost any type of teller-based transaction without going inside the branch. The ITMs also offer extended hours of operation with live assistance.
Total assets at the end of 2018 were $649,562,632 (up 1.77%). Operating income was down by more than 7% in 2018 driven by a shrinking net interest margin and a lack of substantial loan growth. The most difficult challenge we faced was the interest rate environment wherein our interest cost on deposits rose more quickly than the yields we were able to achieve from loans on the asset side. This caused our net interest margin to shrink during the year from 4.05% to 3.87%, which is significant. Though our financial results were not as strong as we anticipated, we entered 2019 with excellent capital, reserves and resources.
2019 | In March of 2019, we converted the Louisville office to a full-service bank branch, which enabled us to begin accepting deposits. On September 19, the Louisville branch hosted a one-year anniversary celebration.
Since the closure of the Southside branch lobby in 2015, drive-thru activity continued to decline as client preferences shifted to alternative points of service such as ITM usage, Mobile Banking or simply using a more convenient location. Given these factors, the decision was made to discontinue service at the Southside drive-thru only location. The Southside branch was officially closed on April 1, 2019. A new ITM was installed in the parking lot across the street from the branch.
The Mid-City branch was closed from July to October 2019 for a major renovation project. As our first branch and built in the 1960’s, it was in dire need of refreshment. The HVAC system needed immediate replacement, the old overhead drive-thru system needed to be upgraded to a newer and more efficient tube system, and the customer lobby was very dated. After 3 months
of construction, a grand reopening ribbon cutting was held on October 18.
Growth in 2019 in total assets, loans, and deposits was very surprising, more than budgeted, and driven especially by $32 million in loan growth by our Louisville presence and some significantly large commercial opportunities outside of Louisville. All the key financial indicators for the Bank and Company (capital, liquidity, asset quality, loan loss reserve) remained very positive at the end of 2019. Our three main sources of non-interest income (secondary market mortgages, trust, and Paducah Financial Consultants) all had gross revenues of over $1 million each for the first time in our history.
Paducah Bank was also honored with a Governor’s Service Award for the SWIPE & SERVE program. The annual Governor’s Service Awards program is administered by Serve Kentucky, Kentucky's state service commission, in partnership with the Office of the Governor, to highlight the importance of volunteer and national service across the Commonwealth.
2020 | We began 2020 with a renewed, energetic effort crafted to infuse a bit of “fun” within the client and teammate experience. In February, we held an all-employee event at the MSU Paducah campus with Jesse Cole, founder of Fans First Entertainment and owner of the Savannah Bananas baseball team, who taught us about finding our own “Yellow Tux.” The laughs were plentiful, the energy was authentic, and the united spirit of our team was simply described as wonderful. Everyone left the event poised for success. Little did we know what was waiting for us only a few days later—great uncertainty and challenges unseen in a lifetime. Bank leadership strived not only to work to ensure the safety of our clients by adopting CDC measures, but swiftly moved to prioritize the safety of our teammates. Our BCP Committee was called upon to lead us through the unknown and the BCP plan was executed to perfection. Throughout 2020, the entire Paducah Bank team pulled together, showed great flexibility and
creativity, and quickly adapted to new and unusual working conditions. More than 80 employees successfully worked from home for most of the year, meetings were held via Microsoft Teams and Zoom, loans were closed and new accounts opened behind plexiglass barriers or in the drive-thrus and parking lots, and the lobbies were locked.
But actions by our federal government were equally swift and put our bank in the position to use such resources to turn what could have been a very tough earnings year into a record earnings year. Within a period of two weeks, 629 PPP loans totaling more than $62 million dollars were accepted, processed, and funded. The teamwork witnessed was unique but not surprising. Our credit team worked long nights and weekends to ensure our clients received the funds they desperately needed. Our team prioritized doing what was needed, appropriate, and in the interest of our clients and our Bank. At the same time, mortgage rates fell to their lowest points in history and facilitated a wave of refinance and purchase opportunities at record levels. We exceeded budget from secondary market gains by $1,226,162 (116.8%) and the increase over 2019 was $1,250,84 (122.0%).
Below are some key Bank financial highlights for 2020 as compared to the prior year:
- Total Bank assets: $784,315,463 (up 9.70%)
- Total Bank deposits: $618,84 0,520 (up 12.65%)
- Total Bank equity: $88,570,904 (up 8.27%)
- Bank net operating income: $11,431,864 (up 22.59%)
Paducah Bank was also awarded the 2020 William. H. Natcher Award by the Kentucky Library Association. The bank was nominated by Susan Baier, executive director of the McCracken County Public Library, in recognition of a recent $10,000 donation and the more than $25,000 in donations from Paducah Bank over the past 11 years. The award is given to organizations that make significant philanthropic contributions to a Kentucky library.
We will all agree that 2020 was a tumultuous, terrifying, and wearisome year defined by COVID, social unrest, and an election that deeply divided our nation. It has been described as “a memorable year that we’d like to forget.” Nevertheless, we anticipated 2021 with much hope because we are a creative, innovative, and resilient people.
2021 | 2021, in many respects, mirrored 2020 with all of the unknowns and uncertainties surrounding Covid-19. At Paducah Bank, many members of our staff and their families were directly impacted by the virus and its variants. Even though our work lives were disrupted, we remained flexible and focused on protecting the Bank and serving our customers. The creativity, discipline and innovation shown by our staff in the midst of the disruptions and upheavals were and are amazing. We adapted well and the Bank experienced excellent results. At the end of 2021, signs were encouraging that we were emerging from the pandemic with far fewer scrapes and bruises than once thought possible.
Paducah Bank’s updated version of the award-winning “This Is Home-Mia” television commercial won multiple TELLY awards in the 2021 national competition for local, regional, and cable video projects. The television spot won a Silver Award for Cinematography, a Silver Award for Directing, and a Bronze Award for Local TV/General Bank.
Paducah Bank was also awarded one of nine annual Governor’s Award for the Arts by Governor Andy Beshear and the Kentucky Arts Council in 2021. These prestigious awards are comprised of nine categories that celebrate the extraordinary and significant contributions of Kentuckians and Kentucky organizations to the state’s arts heritage. The bank was recognized for its varied forms of arts involvement in the community, but the bank’s partnership with the long-standing Artist Relocation Program was one of its most noteworthy affiliations.
At the end of 2021, the Bank’s loan portfolio had never been in better condition. As of December 31, 2021, we had total loans of $586 million and total non-performing loans of 0.11%, which is an astoundingly low number. The consolidated balance sheet showed that the year ended with total assets of $824,803,799, an increase of 4.88%; total deposits of $656,956,644, an increase of 6.18%; and total shareholders’ equity of $91,388,656, an increase of 3.25%. Net income was $13,496,195, up 11.43% from last year.
Paducah Bank has a long and interesting history. As we celebrate our successes, we should not forget to build on the past; to live, work, and have fun in the present; and to plan for continued success in the future.
Paducah Bank History PDF