A simple approach to business has guided the Collinsville Building & Loan through the past 130 years. The mortgage lender has not changed its business philosophy much since its incorporation in 1885. President and chief executive officer Susan Hemker talked to business writer Will Buss last week about the building and loan’s business model:
How many of the building and loan’s 130 years have you been a part of?
“I have been with the building and loan as an employee for about 20 years. And prior to that, I was with Deloitte & Touche, and the Collinsville Building and Loan was one of my clients. So I actually worked on the audit engagement for probably two or three years prior to joining them. I came to them as (chief financial officer), first. Then I progressed from there and took a vice president role, and seven years ago, I moved into this position.”
How has the building and loan evolved throughout its history?
“It has stayed the Collinsville Building & Loan since 1885. The only thing that’s really happened with it is, in 1985, we merged with the Troy Savings & Homestead. So we do have a location in Troy as well, but we are still known as the Collinsville Building & Loan. We’ve stayed the same.”
How does a building and loan differ from a traditional bank?
“We are a mutual association, which means we don’t have stockholders. All of our deposit holders basically own the institution, so we’ve been able to maintain that methodology since the beginning. Also, a big thing that sets us a part from some of the others is we really do consider ourselves a community association. So we bring in deposits from the community. We don’t bring in outside deposits. We don’t have any borrowed funds and everything that we make, we keep in house. We don’t sell any of our loans. It stays here.”
How many clients do you have?
“We have 3,000 customers and 5,000 accounts.”
How has the building and loan been able to be such a stable lending institution in the community for so long?
“I really think it had some great leadership along the way. They were people who had very good business sense and were very conservative. They truly did not make loans that didn’t make sense. They did not get into products that we didn’t have the expertise to go into. So we stuck with the same kind of plain vanilla philosophy. We do mortgage loans. That’s the only one that we do. We have savings and checking accounts. Those are the only deposit products we offer. As far as investments, we keep that very simple. We believe our money should be in homes, in mortgages. Of course, we do have to have excess funds for liquidity purposes, and we really just invest those in treasury notes, very low risk. So our goal is not to be the investment banker, our goal is to be the community banker, and I think by doing that we have sound underwriting practices on our mortgages by requiring money down so that the mortgage actually becomes kind of a partnership. We’re partnering with this person to own this home. They need our help with some of the money, and we need their help in taking care of that home and paying down the loan and eventually paying it off along the way. We’re also very frugal in our expenses. You can see we don’t have the newest and greatest buildings, but we find out buildings are functional, and we keep them nice. But we don’t have the Taj Mahal, that’s for sure.”
What have you enjoyed about your work at the building and loan?
“I have enjoyed seeing employees and watching them progress as far as their relationships with our customers and getting involved in the community and seeing what the Collinsville Building & Loan does. I truly enjoy when we have a customer and they’re buying their first house and they need help. And their mom and dad or grandma and grandpa may come in with them and they’ll sit down and talk with me. Just to get to talk to them about how we do it and just the look on the parents’ or grandparents’ face when they know that they have put their son or daughter, grandson or granddaughter in good hands, they’re going to help them and not get them into something that they can’t handle. I like seeing that and seeing people appreciate that. I find it funny sometimes because we’re a small office, so everyone wears a lot of hats. So it’s very often that I’ll answer the phone or talk to a customer if another person is busy. And people are just amazed. They say, ‘You’re the president. Why are you doing that?’ I’m just here doing what we can. It’s my job, too. The whole idea is to do whatever the customer needs. It doesn’t matter what office you’re in. No matter what position you are, you need to make sure that the customer is happy.”
Contact reporter Will Buss at firstname.lastname@example.org or 618-239-2526.
Job: President and Chief Executive Officer, Collinsville Building & Loan Association @ 701 Beltline Road in Collinsville (618-344-3172)
Outlook: “I think that the great success of the building and loan has to do with the leadership that was there, the board of directors and prior presidents and managers that didn’t do things just because someone else was doing them that way. They made sure that it made sense to do it and kept the business going well and put us in a position where our capital and liquidity would be safe and sound for a long time.”