Stan Dickson’s family owes a lot to the First National Bank in Howell. During the Depression, when his grandparents were having trouble making payments on their home, the bank worked with them to avoid foreclosure.

“My dad grew up in that house,” Dickson says. “I grew up in that house. All because the community bank worked with my grandad.”

It’s not just a fond memory. Until December 1, Dickson, an attorney who now lives in the Detroit suburb of Grosse Pointe Park, was the bank’s largest shareholder.

That was when its sale to the Bank of Ann Arbor became official. The price was $116.5 million, and the new signs will go up in March.

“It was relatively easy,” says Dickson, by phone from Washington, D.C., where he was celebrating the birth of his twelfth grandchild. “It’s being very well received by the community.”

He says the Bank of Ann Arbor’s leaders, board chair Bill Martin and president and CEO Tim Marshall, “espouse the same values that we do. We commit to contribute a certain dollar amount to local charities every year, and we want to be a part of the local community.”

But it wasn’t just a sentimental decision. “The business transaction here is saving money to improve technology,” Dickson says, “and amortizing one technology over more branches.

“The banking industry, more so maybe than any other industry, is either acquire or be acquired. I think that’s just changing times–better technology–but it seems like everybody is either in one of those two camps. ”

“It’s been an ongoing process over the last twenty years,” says Martin, the real estate developer who founded Bank of Ann Arbor in 1996. He and Marshall can both recite the numbers: there were 370 banks headquartered in Michigan in 1985. Today, there are eighty-seven.

Banks are swallowing up other banks, says Martin, “because of backroom costs, [and costs of] continuous increases in governmental oversight.”

With new computer technology, “you’re able to do banking far more efficiently with less people,” he says. “But that technology, a lot of times, small banks can’t afford.” At the same time, they need more people to handle regulatory reporting.

“People have to understand banking is highly regulated,” says Martin, “and I champion it. We don’t want banks to fail, because so many people put their life savings into the banks locally.”

Martin says that as long as he’s around, Bank of Ann Arbor won’t be acquired. That leaves acquiring, which is why its blue-and-white signs can now be found as far east as Birmingham–and, soon, west to Fowlerville and north to Hartland.

But it started because Martin was watching the local banks he’d dealt with as a developer absorbed into faceless corporations. Ann Arbor Bank was sold to a bank in Kalamazoo, which in turn was sold to Pittsburgh’s PNC. Huron Valley National Bank ended up with Dallas-based Comerica, while National Bank & Trust is now JP Morgan Chase.

“He was going into these offices he’d been going in for years, and suddenly he doesn’t know anybody,” says Marshall, who joined the bank in 2005 but has heard the story often. “He doesn’t know where the decisions are being made. And there were all these new policies and procedures.

“He put a group together–a lot of them business associates of Bill’s–from the Ypsilanti community, Peter Fletcher; Bob Teeter; Tom Borders; Jim Bradley, who owned the Buick dealership; Cynthia Wilbanks,” a former congressional staffer who would soon become U-M’s VP of government relations.

“They raised $3 million in capital,” Marshall says. “And today–at the end of June–the bank had $229 million in capital. Quite a remarkable story.”

Bank of Ann Arbor opened in Huron Valley National Bank’s former building at Fifth Ave. and Washington. (Much expanded, it’s still their headquarters.) The first branch was in Martin’s Traver Village Shopping Center, its second on Michigan Ave. in Ypsilanti.

By the time Martin recruited Marshall from a bank in Indianapolis, Bank of Ann Arbor had about $350 million in assets, with another $200 million in its trust and investment group. It continued to add branches locally until the Great Recession, when the Federal Deposit Insurance Corporation asked it to take over a failing bank in Plymouth.

“So we did that,” says Marshall. “That was our first acquisition. And then in 2013, we acquired the former Ervin Leasing, which we rebranded UniFi Equipment Finance.” The Bank of Birmingham followed in 2017.

The Howell deal was announced before the pandemic, put off till the economic outlook cleared, and completed last year. If regulators approve, they’ll add another location in Birmingham this month.

“We’ve tried to … expand our footprint contiguously,” says Martin, “not hopscotch all around.

“We typically surround ourselves with banks that have similar cultures, similar outlooks,” adds Marshall: “A high degree of commitment to the community, a high degree of commitment to nonprofit organizations.”

Marshall says that even in 2020, when many feared the pandemic would trigger a recession, the bank increased its contributions and sponsorships. He expects the total for 2021 to exceed $8 million.

“My motivation was to establish a local bank from a community perspective,” says Martin. “It wasn’t, ‘Hey, I’m going to establish a local bank and make a lot of money.'”

But he’s done that, too. According to Marshall, the bank’s assets have increased from $350 million when he arrived to $2.7 billion now. The trust and investment group has grown tenfold, to $2 billion.

Martin says they can get bigger without sacrificing customer service. “When you call the Bank of Ann Arbor, someone answers the phone,” he says. “You don’t get a recording.” And though more and more banking is being done online, he says, people still want face-to-face contact. “It’s somebody who’s in the same PTA group who happens to be a local banker, and I think that’s important.”

“Bill makes the world go ’round. He’s a dealmaker,” says Victory Automotive owner Jeff Cappo. “That’s the difference. Tim Marshall, too. You call these guys at 7 a.m. on a Sunday, and they’ll get back to you at 8 a.m.

“I started with Bank of Ann Arbor at age fifty with a billion-and-a-half dollars in sales. At sixty-six, that’s doubled.”

Cappo says the bank financed most of Victory’s nearly forty dealerships and has six people working solely on his businesses. “I have 3,000 employees,” he says, “and they do all the payroll,” protecting him from fraud by vetting every check to make sure it’s legit.

“They are a powerhouse bank,” Cappo says. “They are true partners. Bank of Ann Arbor is a huge part of my success.”

“Full disclosure,” says University Musical Society executive director Matthew VanBesien. “Bank of Ann Arbor have been a financial supporter of UMS.” But his appreciation grew during the pandemic, when the arts presenter turned to the federal Paycheck Protection Program to pay its staff.

Though UMS had accounts with national banks, VanBesien says, they “were largely nowhere to be found when the PPP program came up and organizations were scrambling to pull together their applications.” But at Bank of Ann Arbor, “there was no hesitation or parsing out of ‘Well, you know, you’re not really a customer.’ They saw a need in our community and did everything they could to help address that.”

UMS still has one account with a national bank to “primarily help service our international artist relationships and fee transfers,” he emails, “but we consider ourselves true converts to BOAA!”

That community commitment goes back to the beginning. “Almost every board member that was recruited to the bank was someone I knew and had known for a long time, because of my work in the community both as a volunteer and my professional career,” recalls Wilbanks.

Like all directors, she’s also an investor. “In a very important way, the directors are invested,” she says, “not only in their time but of their resources, in the success of the bank.”

The newest board member is Stan Dickson. After selling his stock in the National Bank of Howell, he says, he “reinvested a portion of those proceeds at the Bank of Ann Arbor”– and accepted an invitation to join its board “with much appreciation.”

Peter Schork knows the forces roiling community banking firsthand: he cofounded Ann Arbor State Bank in 2008.

By then, starting a bank cost more and took longer. “We raised $12 million, and it took eight months,” Schork recalls. It’s gotten harder since: “Right now, to start a bank requires a minimum of $30 million in capital,” he says, “and eighteen to twenty-four months to get operating.”

But it’s not just rising costs that challenge community banks. In the past, he says, bankers learned their trade at big banks, then moved into leadership roles at small ones. But “big banks no longer train people,” he says.

“One reason a lot of small community banks all over the United States get sold is because they no longer have the next cadre of people. The sixty- and seventy-year-old males are all retiring and they don’t have thirty- and forty-year-olds to fill that role, so they sell in order to get their shareholder value.”

Ann Arbor State Bank “had an unbelievably good record,” adds Schork. But while Bank of Ann Arbor became a buyer, Ann Arbor State Bank was bought. It was acquired by Level One Bancorp in 2019.

“We decided to investigate our opportunities, to either acquire or be acquired,” recalls real estate developer Ed Shaffran, who was on the board. “There were multiple opportunities on both perspectives, and I think the board made an intelligent decision by saying the right thing to do was to sell.”

And the timing couldn’t have been better. “A lot of community banks had a tough time during Covid,” Shaffran says. “And a lot of community banks are no longer around because of that. So we, as board members, can pat ourselves on the back” at their good fortune, he adds–

“because literally within sixty days after we closed [the sale], Covid struck.”

“As an employee, as president, I planned on working until I dropped dead at a desk,” Schork says. But he “agreed that it was the best thing, based upon the board direction … The shareholders did very, very well–two ‘verys’–and they felt it was the right time, in terms of the value of banks, to sell.”

“Anyone who was a stockholder from the beginning at Ann Arbor State Bank did very nicely,” agrees Bill Zirinsky, who was one of them. But Zirinsky is still connected to community banking: he’s also an original shareholder at Bank of Ann Arbor.

“We’re done acquiring for the time being,” Marshall says. “I’ve seen a myriad of examples where the acquiring bank just didn’t execute at a high level.” So they’re going to “take a time-out” to concentrate on integrating their newest acquisitions.

The Howell bank, he says, has “a very strong consumer lending platform,” but he sees ways each bank can learn from the other to improve. And “we’re going to be able to potentially generate new revenue by them being able to provide trust and investment management services to their clients.

“It’s not rocket science,” he says. “It’s just doing the right things.”

And does Bank of Ann Arbor plan to keep doing them, independently, as long as Bill Martin is around?

“That’s exactly right,” Martin says.