Q&A with Courtney Schmitt on First Federal Savings Bank’s 120th anniversary
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Evansville-based First Federal Savings Bank celebrated 120 years of service to its customers and communities in 2024. The financial institution offers innovative and personalized banking solutions at branches in Evansville, Newburgh, Washington, Petersburg and Henderson, Kentucky.
Vice President and Marketing Manager Courtney Schmitt spoke with Inside INdiana Business about what makes the financial institution unique and what’s next for the bank in 2025.
This interview has been edited for length and clarity.
Tell me about the history of First Federal Savings Bank.
We were established on Oct. 20, 1904, and we’ve had our CEO with us now for about 45 years. Mike Head started as a teller and has worked his way up to CEO, where he’s been since the early 2000s. So we’ve had consistent leadership, which has been great.
We started on the west side of Evansville, and we’ve stayed pretty much headquartered, main hub in Evansville. The building serving as our current headquarters was built in 2006. We operate 10 branches. We established a branch in Henderson, Kentucky about a year and a half ago. We’re continuing to grow.
What services does the bank offer?
Checking accounts, any deposit accounts. We do have business deposit accounts as well. Business lending. We don’t do any type of investments or trust accounts. It’s just business deposit, mortgage lending. We’ve got all kinds of mortgage products as well.
What is Home Building Savings Bank?
We have two branches in Petersburg and Washington that operate under the Home Building Savings Bank name. We acquired them in 2006. There is currently a First Federal Savings Bank [of Washington], so we can’t use that name there. When we acquired [Home Building Savings Bank], we just kept that name. They are part of our brand, just operating under a different name.
What was behind the decision to expand into Henderson, Kentucky?
Henderson is a hop, skip and a jump from our headquarters, and we wanted to expand our footprint into this region. We had a small customer base there already, mostly business accounts. Opening a branch in this area allowed us to service these customers better and provide more opportunities for growth in another state.
What sets First Federal Savings Bank apart from other financial institutions?
We are a community bank. That is something that we pride ourselves on, our customer service. We are small enough that we can still build personal relationships with each of our customers and offer similar innovative banking solutions that the bigger banks offer. We don’t have anybody who receives a voicemail or a call tree whenever they call our phone. You’re greeted by somebody each time.
All of our loans are serviced in-house. If people have questions, they can call, and they can talk to somebody who’s not halfway across the world. That helps build on our customer service relationships with our customers.
With us still being a small community bank, our money’s invested back into the community. We support a lot of local initiatives. Sports teams, high school teams. We may not be able to do some of the larger events because of our size, but we still try to make a difference at our scale, giving back to our community.
What challenges has the bank faced in recent years?
It’s been difficult with all of the rate changes and everything that’s happened over the last almost two years now. Banks are almost totally reliant on interest rates. We saw rates go up 525 basis points in a 13-14 month period which brought a lot of challenges to banks.
Also, we’ve got credit unions to compete with. That’s difficult because they’re much larger, full transparency, not paying taxes, have a lot more options for sponsorships and to offer products that are lower cost.
We have to do our best to stay as competitive as possible with those credit unions that may not have the relationships and the community focus that we have, but they’re able to offer 3.50% on interest checking accounts where the smaller community banks aren’t able to do that.
And then, it’s a saturated market in this area. We’ve got probably 10 banks that we have to compete with as close as 450 feet down the road.
How do the lenders feel about the mortgage rate outlook for 2025?
While no one can predict the mortgage rates, they’re hopeful that after the first of the year and the new administration gets settled in, we’ll see rates come down a little. I don’t think we’ll see the 2s and 3s for mortgage rates any time soon, but borrowers are getting more acclimated to the current mortgage rates.
In turn, I think we’ll see an uptick in housing inventory. Sellers have been reluctant to give up their 2-3% interest rates, but if we can see the rates back in the 5s or low 6s, current homeowners will be more receptive to relocating. The potential is there for a refinance boom if the rates would get in the 5s again. They’re very optimistic about what 2025 can bring after experiencing 7% and 8% rates in 2024.
What’s next for First Federal Savings Bank in the new year?
Continuing to acquire more customers. Our big focus is growing. We have a pretty good footprint right now. Our leadership team always looks to see if there are other opportunities, but right now we are able to service each of those branches efficiently and effectively without spreading too thin.
As far as our footprint goes, we’re where we need to be. We’ve got teams that have been here for years and years. And then we also have a lot of new hires. So getting all of our employees trained and up to speed and helping train them on our culture.
What does it mean for the bank to reach its 120-year milestone?
Our marketing team worked hard on a history book that was fun. We got to go to the library and pull out archives of news postings and newsletter articles dating back to 1904. It’s cool to be able to see the transition over the years of how much we have grown. But our priority of customer focus and being community-driven has not changed. We have always had our CEO say, “If a customer has a question, give them my cell phone number.”
We have three events per year where we invite each of our bigger business and consumer customers and let them know how much we love them and appreciate their business. That is why we have been around for as long as we have, not getting too big for our britches, so to speak. We want to keep it small and more intimate so that customers feel like they’re getting the attention they need.