About Lake City - Lake City Story
Lake City Bank History
Lake City Bank Celebrates a Rich and Colorful History
Lake City Bank is the third oldest of the State-chartered banks in Indiana and the oldest in Kosciusko County. Lake City Bank commenced business May 14,1872 as a private bank and was soon after chartered as a state bank. In its early years, the bank experienced both the freewheeling banking style of the turn of the century and the more structured system created in the 1930’s. Lake City Bank has survived and prospered through each circumstance, including the most devastating of all, the Great Depression.
An interesting perspective of the history of Lake City Bank is an advertisement that ran in the Northern Indianian in 1872, the year President Ulysses S. Grant was re-elected. The birth of Lake City Bank was promoted as follows:
‘The new banking institution in this place is getting everything in readiness to go into business. The new room of Dr. Boss, next door to Wynant’s Drug Store, has been secured, a counter put in, and the arrival of the safe is daily expected. It is to be called the Lake City Bank.’ A follow-up article three weeks later read: ‘Lake City Bank, having received their large fire and burglar proof safe are now prepared to do all kinds of banking business, such as collecting, buying and selling exchange, receiving deposits, and discounting notes and bills. Interest allowed on time deposits. The services of W.B. Funk have been secured, whose reputation needs no commendation as a correct and honorable business gentleman. Banking rooms south side of public square.’
On May 14,1872, James McMurray, a prominent and wealthy businessman, was named president of the new institution, which was located next door to Wynant’s Drug Store on the town square. The newly created bank had assets of $60,000. John Lewis, J.B. McMurray and James McMurray served as co-proprietors. After state incorporation, 26 charter stockholders were selected and the revamped institution moved to its second location on the south side of the town square in a building known as the Indianian. From the stockholders, a board of directors was selected, including: Hudson Beck (President), John H. Lewis (cashier), Moses Wallace, H.B. Stanley, John Grabner, Metcalfe Beck, Christian Sarber, J.B. Lichtenwalter, Hiram Hall and Albert Tucker.
(Another note of interest — privacy does not seem to be an issue in 1883 as the cashier mails acknowledgement postcards to customers listing the amount credited to their account!)
Hudson Beck continued as president until 1885, when William Funk was elected president. His popularity as a businessman and his extensive acquaintances throughout the county helped increase the popularity of the bank. Mr. Funk advanced from collector and bookkeeper to chief executive officer. He held positions of authority in the community and in the banking world. His son, Elmer B. Funk, who joined the bank at age 18 in 1895 as an assistant bookkeeper, later also served as executive vice president. He served LCB for 45 years! This colorful story illustrates the frontier-like enthusiasm that the Funks held for Lake City Bank:
‘Few persons knew it, but the day of the … Auburn bank robbery, “Field Marshall” Elmer Funk, our town’s prominent bank head and father of hard-hitting local vigilante force, had his boys all prepared to go to work had bandits been sighted in this territory. Many of this organization are known, of course, but it is doubted if over half of them are recognized by the general public. When an emergency arises, you may depend on it that there will be a vigilante on every corner. Wide reputation of the well organized group has no doubt done more to keep bank bandits, thugs and yeggmen (robber or crook) away from this county than any other single factor.’
The 1920’s were thriving years for the bank as industry was booming in Warsaw and many companies relied on the bank to assist in their growth. The depression of 1929 and subsequent bank holiday left only one bank open of the original five in Warsaw — Lake City Bank.
Judge John Sloane was president of Lake City Bank during the Depression and for a total of 23 years. Sloane’s niece, Mildred Radatz of Ft. Wayne, lived with him as a child and recently told Al Disbro about an incident she recalls happening in the early 1930’s.
After many banks had closed following the “bank holiday” during the Depression, people lost their trust in banks and wanted their money. Lake City Bank was eventually the only local bank still operating. Sloane arranged with a large corresponding bank in Indianapolis for enough cash to give all depositors their money if they requested it.
Driving to Indianapolis and back during the night, Sloane returned to Warsaw before the bank opened the next morning. As expected, there was a large crowd gathered outside the bank’s front door, and the people were talking about getting their money out of Lake City Bank and where they would put it.
When the doors opened, the lobby was immediately filled with patrons. Not stating that he had just returned from Indianapolis with a car full of cash, Sloane announced that anyone wishing to withdraw funds could readily do so. Just then a woman’s voice was heard over the clamor of the crowd: “John Sloane, if I can’t trust my money with you, I don’t know of any man I can trust!”
The chatter quickly came to a halt. Whether they didn’t know where they’d hide their money if they did withdraw it — bury it, put it under a mattress, or someplace else — the people gave their money back to the cashiers, the crowd disbanded, and Lake City Bank carried on business as usual.
That evening when Sloane got home and sat down, Mildred recalls him saying, “That lady saved our skin today.” So if it were not for the well-known integrity and righteousness of one honest man and one voice that spoke up, it is quite possible that Lake City Bank would not be as we know it today.
In 1930, Lake City Bank became ‘The Bank With the Chime Clock’. The banking community stressed that money should be saved first if a major purchase was desired. Most wage earners had savings accounts; few had checking accounts. Loans to “people of property” was the rule, and these single payment loans were secured by real estate. The automobile’s greatest effect upon the American economy was the introduction of the Time Payment Plan. These plans had seldom been used except for real estate, sewing machines and pianos or organs. An auto, which had a price of about $1,000, was out of reach for the average person. Bankers of the era thought that a loan to an individual to purchase a car was unsound and had no business in a bank’s portfolio. Thus was born the automobile finance industry to fill the gap between manufacturing and purchasing. Banks began to see the new finance companies prospering and becoming large depositors. Attitudes began to change in the banking arena. However, it took another ten years before car loans became an acceptable part of banks’ loan portfolios.
During the War, Lake City Bank was active in the sale of bonds and in the handling of ration banking. The 1950’s gave way to the age of machinery when the bank installed an “amazing new machine” called the NCR Proof Machine. In 1952, the Indianian location was remodeled and the Lake City Bank clock was removed and stored.
In 1961, under Herb Robinson’s presidency, Lake City Bank moved into its newly constructed building at Indiana and Center Streets, the site of the former Hotel Hays and the clock was reincorporated into the theme. In 1965 LCB built its first branch office in Winona Lake. In 1966, Bruce Wright was appointed President and the first branch acquisition occurred in Silver Lake. In 1970, the first annual Egg Breakfast was held to emphasize the importance of the egg industry to the local community. In 1972, the bank celebrated its 100th anniversary and also added a second story to the present bank building.
Elkhart native, Doug Grant, became president in 1980 when Lake City Bank was a $100 million bank with five locations, employing less than 100 people in Kosciusko County. The company was primarily a mortgage and consumer bank. The shareholders were mostly local individuals who owned bank stock because they wanted to support the hometown bank. The industry was highly regulated, with tight governmental controls on products and interest rates. In addition, Indiana banks were further handicapped by the State of Indiana’s restrictions on opening new branch offices.
De-regulation within the industry opened the door for expansion. The later 80’s and 90’s saw rapid growth in offices and assets, as well as a new emphasis on commercial banking. In 1983, the Lake City Bank clock logo was retired and replaced with the current logo, the “Sailing L” within a circle representing the universal solidarity and distinctiveness of our organization and the many lakes of the communities served by Lake City Bank. Hometown retail banking was enhanced by the growing commercial business. By the end of the nineties, the bank had grown to over 40 locations in 15 counties with assets of nearly $900 million. New frontiers were explored successfully in more populated markets such as Elkhart and Mishawaka.
Mike Kubacki joined the team as president in 1998. As the bank entered the 21st century, it also entered the league of the “big banks” with assets over $1 billion. Laying claim to Northern Indiana as “Lake City,” a “See Lake City” branding campaign was launched to spread the word about this new, old bank in highly competitive commercial arenas.
Today, we are stronger than ever with assets of $3.4 billion. Expansion continues in Central Indiana/Indianapolis with three full-service branches now open and two more planned in the next couple years.