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First National Bank in Philip celebrates 100 years of business and community

First National Bank in Philip will mark its 100th year on September 22nd with an expansive celebration. The planned festivities include a community barbecue, a performance by a stand-up comedian, a dance, an open house, more entertainment, and the unveiling of a commemorative bronze statue.

In its 100-year history, the bank has been one of the most successful in the West River area. With its state charter created on October 30, 1906, the bank started in Midland and was originally named the Bank of Midland. Today, First National Bank in Philip has survived where many others have failed; almost continually growing in its number of customers, its employees, and in its assets.

"Continuity of banking with First National Bank can be seen and felt in the number of years of its employees," said Bank President Ray Smith. "We have 27 full and part-time employees, with 12 having been with us for more than 20 years. There is a comfort in knowing the same people you have done business with will still be there.

"Banking is a personal thing," continued Smith. "Our customers consider this bank as 'their' bank. That sense of ownership has been what it takes to have kept this bank going for 100 years."

A brief history

In its first year, the bank had a capital of $18,000 and deposits of $90,000.

In 1914, the institution converted to a national bank, changing its name to the First National Bank of Midland, and within a year increased its capital to $30,000 and its deposits to $238,000.

The bank survived panic years where "runs" on banks could ruin a business. It briefly prospered following World War I (1915-19), only to weather the first failures of struggling South Dakota farmers and ranchers in the post-war Great Depression.

Tremendous work lead to a few good years, then 1930 saw the start of the "dirty thirties", grasshoppers, drought, thistles, government relief checks, government cattle and hog buying programs, W.P.A., low prices ... and bank failures. Due to the stock market crash of 1929, many area banks closed within a few years. The federal government closed all banks for the 10 days known as the infamous "Bank Holiday of 1933." A telegram from the National Banking Department in Washington to the First National Bank of Midland allowed the bank to reopen its doors on March 15, 1933. The telegram was sent to only the strongest banks.

Slow but steady area growth lead to a major change for the bank in 1938. Its location was transferred to The First National Bank of Philip, after purchasing this branch from The First National Bank of Rapid City (today the Wells Fargo bank). The branch was sold because of the cost of transportation, commodity prices, drought, interest rates and other business factors. The new bank, more centrally located to its customers and now in the county seat, became First National Bank in Philip.

First National Bank of Philip had its own history. Established in 1907 as the Bank of Philip, it survived as the other two town banks - First State Bank and the Security Bank and Trust - permanently closed their doors.

The Bank of Philip building, built in 1910, was the first brick structure in Philip. The First State Bank building, built in 1919, was far grander, but stood empty from 1923 to 1930. It was purchased and reopened when The Bank of Philip became a national bank and changed its own name to The First National Bank of Philip. From 1938 until 1968, that building housed the Bank in Philip.

In 1945, at the end of WWII, First National Bank in Philip's capital was $105,000 and its deposits were $1,903,000.

The 1940s saw a great development in the West River country, which lasted into the early 1950s. The cattle market crash, the recovery of the war hurt countries, and an escalation of the Korean War slowed the growth of the bank and of the country in the 1950s. In 1956, the bank had $3.5 million in assets.

During the last 100 years, the western South Dakota region has seen many changes - from open-range days through the homestead era, the drought and Depression years, seven major wars, the high interest rate period and agricultural problems of the 1980s and into more diversified and stable agricultural economy. The bank has witnessed many changes in its methods - from the pen-and-ink days, to mechanized equipment, to today's highly technical electronic methods.

"Technology has changed a lot of things, including banking," said Smith. "A check can clear in just a day or two, and that will only get faster." The ability to "float" money for several days is a thing of the past.

A major remodeling program took place in 1961. Once again new facilities and equipment increased the efficiency of banking in Philip.

With missile bases being built in the Dakotas in the early 1960s, the region and the bank began developing again. The town of Philip received another source of non-agricultural income with the start of Scotchman Industries in 1967. The 1960s also saw an expansion of farming and increased wheat production.

In 1969, the First National Bank physically moved across the street and up the block to a brand new building with a drive-up window and increased privacy for customers. In 1981, that "brand new building" was completely remodeled, inside and out. A complete, state-of-the-art computer system was installed.

In the early 1970s, grain prices jumped up three to four times the previous prices and cattle prices reached a 20-year high. Inflation climbed; the United States was in the unpopular Vietnam War, the cattle market crashed, fuel prices climbed, drought set in, and interest rates reached the highest level since the Civil War.

The 1980s began with the worst of times with low cattle prices, cheap grains and high interest rates. The economic situation did slowly improve with new government programs and good prices at the end of the decade. This period has some parallel points to the 1930s. The area had four dry years, banks failed, and farmers and ranchers experienced tremendous hardships.

In the mid 1980s, First National Bank in Philip made an important decision. It increased its agricultural lending - even while both the financial and agricultural industries were having problems. The results were outstanding: account numbers grew, as did loans and deposits. The bank hired more employees to handle the new business. The insurance agency was moved out of the bank to make room for the new officers.

The 1990s were good to both agriculture and First National Bank in Philip. The high moisture years from 1996 to 2001 produced a new growth for the bank and western South Dakota. Loans, deposits and capital all grew. Interest rates dropped, and it was again one of the "good times".

Drought started again after 2001 and still continues. As so many times in the past, this decade is so far a "trying time" for the bank and its customers. The bank is still strong in assets, capital, management and employees, according to two national rating agencies which give the bank their highest ratings. In 2006, the bank has a capital of $17,600,000 and deposits of $92,300,000.

In 2002, construction started on a new bank building, and First National Bank moved into the new facility in March of 2003. The old building became an expansion to the community's supermarket. The new, 12,500 square foot, single-floor building was designed with customer confidentiality in mind.

Notable Directors and

Recent Presidents

Herman Lovald was a bookkeeper in 1919, and worked his way up to president in 1949. He served as president until 1963 and as a director until 1967. Director Harvey Madsen served from 1950 to 2005 - the longest term of any director, officer or employee in the history of the bank. Gregor Weber served as director from 1963 until he retired in 2000.

Scott Lovald, who began as assistant cashier in 1940, worked his way up to president in 1963, which he remained until 1972.

Ralph Jones, bank president from 1972 until 1975, was like his father in that he served as both a director and president.

Charles W. Ekstrum was elected president in 1975 and served until his retirement in 2004. He was president of the S.D. Banking Assoc., S.D. Representative to the American Banking Assoc., Director of the Minneapolis Federal Reserve Bank, Chairman for the S.D. Banking Commission, and was on many other committees.

Ray Smith joined the bank in 1985 and was elected president in 2004.

Current bank directors are Chairman Ralph Jones - since 1978; Charles Ekstrum - since 1972; Gerald Carley - since 1979; Morris Jones - since 1987; Duane Roseth - since 2000; and Ray Smith - since 2003.

In 2006, First National Bank in Philip has over $121 million in total assets. It is not one of many financial institutions that have merged, sold, changed their mission, had government bail-outs and/or all of the above.

The bank remains what it started out to be, "a locally owned bank to serve area agriculture, business, and people," according to President Herman Lovald in 1938. "Safety of its depositors' money has always been the concern of our bank. The bank has met every obligation to depositors promptly, fully and upon demand. Safety of its depositors' money is the paramount obligation of the bank."

This was and still is the position of First National Bank in Philip.