Horicon Bank in eastern Wisconsin had fairly typical small-town beginnings, but has blossomed into a bustling and innovative enterprise.
It’s still based in that same community, near the scenic marsh from which the town and bank draw their name. Yet its expansions over the years have had it dotting the eastern part of the state with new branches. A fintech acquisition in 2020 brought increased digital offerings and capacity. Its latest move will be one of its most significant, into the city of Milwaukee this month, after a merger with another community bank with branches there.
“We hope to be able to translate our business banking success to the Milwaukee community,” said CEO and chair of the board Fred F. Schwertfeger. “We’re really interested in working with family-owned businesses like ours and employee-owned [businesses]. I think we have a nice story to tell about our interest in community and our culture, and I hope the Milwaukee contacts that we have already and ones that we’ll make will appreciate it.”
The Schwertfeger family began investing in what was previously called Horicon State Bank in the mid-1960s, several decades after the business began. Family members continue to serve in leadership at the bank.
Schwertfeger joined his father in the business in 1982, when he estimates the bank had roughly $15 million in assets.
“One of the things I was impressed with was what the role of the community banker was and is,” Schwertfeger said. “And that is to be a real servant to the community and to help it grow and prosper by using local deposits to fund local businesses and homes and farms. And so that’s what we did.”
Now his son, daughter, son-in-law and nephew also work for the business which has notched $1.25 billion in assets, with 24 branches expected by year’s end. Since 1978, the Schwertfeger family has been its principal shareholders via holding company Sword Financial Corporation.
Yet, even with its current embrace of high-tech banking, Horicon Bank continues to foster a family-oriented atmosphere. Its employees own a piece of the pie, about 25 percent in an ESOP that started about 20 years ago.
“We really have fostered the ability for employees to be owners of the bank and participate in our own success, which has been considerable,” Schwertfeger said.
One-tractor town
Schwertfeger jokes that Horicon is a “one-tractor town,” and he isn’t wrong.
Business with John Deere, which still operates in Dodge County, has been important for the manufacturer, its employees and the bank. Horicon Bank was founded by Daniel C. Van Brunt, inventor of the grain drill, in 1896. Van Brunt sold his manufacturing company in 1911 to Deere & Company, which continues today with an outpost in the community called John Deere Horicon Works.
Jay Vanden Boogart, a former executive vice president and current retiree/consultant, recalls another time in history when the success of John Deere also influenced the success of Horicon Bank. Back in the 1980s, John Deere was transferring many marketing and engineering professionals from North Carolina and other plants to Wisconsin, Vanden Boogart recalls.
Horicon Bank had an opportunity to provide those workers with mortgages. They ultimately built a new bank branch to serve the community of Beaver Dam, where many settled.
“We’ve always had a good relationship with Deere and we certainly have done a tremendous amount of business with not only the professionals but also the factory assembly people,” Vanden Boogart said. “They’re a great company. They have great workers and they’re compensated competitively. They made for a really, really solid customer base for us to start with.”
The bank still offers mortgages, including many during the low-interest-rate environment, but rounds out its portfolio with strong ag and commercial lending teams. Each of its communities has a slightly different lending profile, and Vanden Boogart thinks the bank’s adaptability has been key.
“I think part of the reason for our successes are flexibility and responsiveness to our customers’ needs and the changing marketplace,” Vanden Boogart said. “We tend to not get in our own way like some of the big banks do. I’ve always explained to my friends and colleagues that Horicon Bank has always been a bank that tries to figure out, ‘How can we do this?’ Not, ‘How can we deny this?’”
At certain times in the bank’s history, it grew exponentially.
“Even back in the ’90s, my dad put us in a position to be innovative,” recalled Fred C. Schwertfeger, Fred F.’s son and the bank’s president, citing an open architecture data processing core and an environmentally conscious brand that embraced its marsh-area location.
The bank has continued to lean into that brand, not just in name but also with its forays into using geothermal energy for some of its branches (see “Wisconsin bank looks below the surface for heating answers,” April 2023 BankBeat) and solar panels in others as well as digital-oriented banking.
Those digital pieces have “probably left us in a place where we can be more agile and dynamic,” Fred C. said.
The company has been honored as a top workplace in the Milwaukee area for many years running. That welcoming, accessible culture has given the bank a place at the table for certain acquisitions, Fred C. said. And the bank has committed to retaining as many of the employees of those acquired banks as possible.
“We feel like we’ve created a family atmosphere where a person can leave for the afternoon and see their kids play a baseball game. We’ve created a warm environment for people here. And so many working moms in our organization that really are the foundation of our workforce. I think we’ve created a nice atmosphere for them,” Fred C. said.
The bank also leans into its culture, with bankers highlighting its “core virtues,” which are capability, honesty, respect and energy.
Part of the bank’s calling is to love others, Fred C. said in a video celebrating the bank’s 125th anniversary a couple of years ago.
High-tech expansions
Among the changes at Horicon Bank over the years has been its move into new technology, including through its KindMoney, a digital savings platform.
“It allows us to scale potentially nationally,” Fred C. said. “It is a more intentional reflection of Horicon Bank’s value system and ideals.”
At the moment it’s primarily set up for retail deposits, he said, but because there is little overhead, the bank can promote great rates. The platform’s seamless, five-minute online account opening experience doesn’t hurt, either.
“It’s given us the opportunity to innovate there and experiment with things and then bring them into the bank,” Fred C. said.
The bank several years ago acquired the technology of an Atlanta-based fintech called Monatto, creating different opportunities for its customers. Monatto’s RoboSave product uses artificial intelligence to help customers save their money.
The tech skillset necessary to be competitive in today’s environment can be hard to cultivate internally at a community bank, so the pair of employees who came with the acquisition helped. Having a software developer on the team to connect all the disparate systems has been useful, he said, and has helped attract additional staff with strong tech backgrounds. That includes Cyrene Wilke, the bank’s chief information officer and senior vice president, who started about a year and a half ago.
“Community banks like ours, we’ve got a legacy of 125 years, which is excellent, but we’ve got to be able to continue to be comfortable with shifting and meeting our customers where they’re at today and in the future,” Wilke said.
Through its Project Accelerate, the bank extends a listening ear to employees, opening the door to suggestions for improvements to internal systems and processes.
“We’ve been spending a lot of time taking paper processes and digitizing them, looking at ways to improve the customer experience, introducing technology to our team members to improve productivity,” Wilke said.
She sees continued expansion of digital opportunities as a core part of its strategy for the future.
“We’re really trying to adjust our model so that we can augment our current services with the newer technology and be able to deliver high levels of service to our customers,” Wilke said. “I think that’s what we’re going to continue to focus on — doing what we do well, which is service our customers, our small business customers, offer them tools to make their lives easier and continue to grow the organization.”
Another change is a little more brick-and-mortar focused.
Horicon Bank has always been only about an hour’s drive away from the state’s largest city, Milwaukee, and it is finally going to have branches there thanks to the merger of Cornerstone Community Bank into Horicon Bank.
The short-term future of the bank is to continue to work on digital efforts, as well as onboarding the new Milwaukee branches and working with those new customers.
“It sort of introduces us to the whole state once you’re in Milwaukee,” Fred C. said. “That will keep us busy for a long time.”