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WITH VIDEO: Jonestown Bank looking forward to 140 more years

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Troy A. Peters worked and lived in Lebanon County for years, but the first time he drove to Jonestown Bank and Trust Co. headquarters, he needed help.

“I had to Mapquest it,” he laughed. “And I only live in Annville.”

Before he came to Jonestown for that 2006 job interview — which resulted in a vice presidency that eventually led to his current position as CEO — Peters, 45, obviously didn’t know much about the bank or the town. He knew one thing — he wanted to return to community banking, and Jonestown was one of the most stable community banks around.

And after celebrating 2013 as its 140th year in operation, the 10-branch network that’s still a small business is charting a course for continued growth.

Executives said that could come in the form of branch growth outside Lebanon County or in online and mobile banking.

One place it won’t compromise for growth, however, is its connection with the community it serves. Ed Martel Jr., the bank’s senior vice president for sales, marketing and branch management, said Jonestown strives for a hyperlocal connection at every branch, encouraging its 130 full- and part-time employees to participate in community events and to volunteer.

Peters said the bank’s employees volunteered 1,300 hours of their time to community and charitable organizations in 2013.

When a larger bank closed its Newmanstown office, leaving the small, unincorporated town without a bank, Jonestown jumped on the chance to open a branch at the closed location.

“And now, we’re the ‘Bank of Newmanstown,’” Martel said. “Maybe that’s not as attractive to a bigger player, but it is to us. It might not be profitable to a larger bank, but it is to us.”

Martel said many Jonestown executives, including him and Peters, are veterans of larger banks who had been downsized during previous mergers. Jonestown offers the opportunity, he said, to fit into a more-stable bank committed to the community.

Jonestown manages $432 million in assets as of Dec. 31, according to the bank’s 2013 annual report, an in-between spot where it could be a valuable commodity to a larger bank looking for a trusted partner in Lebanon County or be primed for additional growth.

Major bank players such as Bank of America, First National Bank and Citizens Bank of Pennsylvania are active in other parts of the midstate but have no Lebanon County branches. Sovereign (now Santander), PNC and Susquehanna have limited reach in the county.

Peters said the last offer to buy the bank came “before my time, it was a few years ago,” and that the current slate of stockholders doesn’t seem to be interested in selling.

“We have a plan that’s valuable to our shareholders,” he said. “Yes, shareholders have to entertain offers. But our shareholders believe in our model, and we have a board and management that produce exceptional results.”

That attitude and business plan are part of what has endeared it to the local community, said Evelyn Isele of Jonestown. The 95-year-old lifetime resident completed a history of the bank in 2013 that the bank released in a special publication for customers and residents as part of its 140th anniversary celebration.

She said not much changes at the bank — including its economic principles — and that makes it an attractive destination for doing business.

“They really have a good trust (of the people),” she said. “They seem to help their customers. The people that have been there always seemed like permanent fixtures. People always liked that.”

Jonestown’s success in Lebanon County could expand as well. It opened a Lancaster County branch in Ephrata in 2011 — its first outside the county — and could continue to push its boundaries into eastern Dauphin County, southern Schuylkill County or further into Lancaster County, executives said.

Bank officials said they have the resources to devote to the latest banking trends, including online and mobile banking.

Peters admits Jonestown sometimes is at a disadvantage with bigger banks, especially in one area: regulation.

The Dodd–Frank Wall Street Reform and Consumer Protection Act, the government’s answer to the near-catastrophe of the recession, has forced unprecedented levels of regulation compliance on all banks, including community banks.

Peters said Jonestown is paying $40,000 to $50,000 more per year than it was a couple years ago in workforce and consultants to understand and implement new compliance regulations. But he said it’s something Jonestown and other community banks will manage.

“It’s not something that’s going to put community banks out of business,” he said. “And it won’t put us out of business, not after 140 years.”

About Jonestown Bank and Trust Co.

Year established: 1873

Assets under management: $432 million as of Dec. 31, 2013, up from $397.5 million at the end of 2012

Deposits: $364.57 million for the period July 1, 2012, to June 30, 2013

Net income: $4 million in 2013, down 1.7 percent from $4.07 million in 2012

Employees: About 130 full and part time

Branches: 10 (nine in Lebanon County)

Market share by deposits: Second in Lebanon County, with an asterisk. The list compiled by the Federal Deposit Insurance Corp. pegs the bank’s Grantville branch in Dauphin County when it’s actually in Lebanon County. Counting that branch’s deposits in Lebanon County gives the bank $357.6 million in deposits in the county, ahead of Wells Fargo at $345.9 million but still trailing Fulton’s $664.4 million in deposits.

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