Community Bank and TrustEmployees at Community Bank and Trust in Neosho own the bank, which has 14 branch locations.
An Employee-Owned Bank
By Karen Buschmann
The bank owner is the first employee you will see when you walk into Community Bank and Trust in Neosho. It’s not because the bank’s entrances lead to the executive offices. It’s because nearly every employee of Community Bank and Trust is an owner, including the top executives, the loan officers, and the tellers.
It’s a rare business model among the banking industry—there are only a handful of majority employee-owned banks in the nation.
However, it’s a business model that has worked very well for the Neosho bank and its 14 full-service branch offices across southwest Missouri and southeast Kansas. Bank customers like knowing they are working with employees who have a vested interest in their success.
That attitude is found in Community Bank and Trust employees, many of who spend their entire career working at the bank.
“I was a bank teller at Community Bank and Trust when we moved to the employee-owned model in 1986,” says Dana Sybert, who today is a vice president and internal auditor. “I am so thankful to work at a place where the work that I do every day has a direct impact on my future. I think it impacts how we treat our fellow employees, and most of all, it affects how we treat our customers.”
All full-time employees of Community Bank and Trust automatically become part of the Employee Stock Ownership Plan. Community Bank and Trust contributes to the employee’s account based on a percentage of the employee’s salary.
Unlike most other retirement funds that require matching funds from the employee, Community Bank and Trust funds the account entirely. An employee is fully vested after five years. The program gives employees financial security.
“There is no way, on my own, I could have put away as much as I have been able to secure as an employee-owner of Community Bank and Trust,” Sybert says.
With all employees approaching their jobs like an owner, the bank has held steady during tough economic times. Instilling that owner attitude was one of the key reasons Bank Chairman Rudy Farber made the decision to move to an employee-owned system in 1986.
“The decision was made for two reasons,” Farber says. “The first reason was that it just seems to me that an organization where everyone has an ownership stake will have a higher probability of attracting good people. Secondly, as I looked around, it appeared to me that at some point in time we would be faced with a situation in which we would have an institution where it would be hard to be kept as a community bank if something were to happen to me. I felt like by going employee-owned, we would have an opportunity to involve the employees in ownership and be able to not have it taken over by some of the larger banks that would change the philosophy.”
Farber says the program has helped reduce turnover, especially at the middle and senior management levels. It has also helped develop a culture of accountability.
“It tends to motivate employees to make decisions on a risk-adjusted basis,” he says. “Quite frankly, everyone is looking at what everyone else is doing. Your actions are impacting fellow employees’ future financial security.”
Until 2012, the bank’s ESOP controlled 45 percent of the bank’s stock with Farber owning 55 percent. However, Farber’s long-term vision was to allow the employees to eventually own 100 percent of Community Bancshares Inc., the parent company of Community Bank and Trust.
He followed through with that dream in 2012, when he unveiled a plan to allow Community Bancshares Inc. (the ESOP account) to purchase a large share of Farber’s stock and continue to make additional purchases until it owns 100 percent of all outstanding stock, thus leaving the ESOP as the sole stockholder.
At the time of the announcement, Farber emphasized that he had no plans of retiring or leaving the bank.
“I love what I do and being associated with such wonderful People,” Farber says. “I would consider it a great fortune if, like my father, I could pass away at work at the bank.”
Indeed, Farber’s roots in the bank run deep. In the early 1940s, his father, Arnold Farber, and Logan Higdon bought controlling interest and operated the bank jointly until Arnold’s death in 1980. Higdon was active in the bank until his death in 1996.
Rudy Farber began working at the bank in February 1957 at the age of 16. He took over as president for his father in 1979 and was named chairman in 1997.
Farber has carried on the values that he learned from his father, values that have allowed the bank and its customers to thrive during tough economic times.
“My father said a banker is a little like being a doctor,” Farber says. “If a doctor does not make the correct diagnosis or if the doctor gives you too little medicine, the patient will not do well. If the doctor gives you too much medicine, the patient does not do well. Our job is to give the patient just the right amount of medicine, and if we do that, you will have a successful outcome for the most part.”
In addition to turning over ownership to his employees, Farber has also worked to give his employees sound advice they can follow at work and in life.
“I have one favorite quote I like to share with our staff,” Farber says. “If you ask a fellow working why they are doing something in a particular way, the last answer you want to hear is that it is because we have always done it that way.”
Thinking outside of the box by establishing this unique employee-owned group of banks in southwest Missouri has worked well for Community Bank and Trust.
“I am really proud of our record as far as being a well-managed bank,” Farber says. “We don’t have many of the problems that you read about that some troubled institutions have run into. We have been careful with what we have done. We want to lend money to people who will succeed. That way, we are all successful.”