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Downturn? Not for This Main Street Bank in Iowa

During the same week in September when the government took over Fannie Mae and Freddie Mac, the Farmers Savings Bank in eastern Iowa opened its...
October 29, 2008

During the same week in September when the government took over Fannie Mae and Freddie Mac, the Farmers Savings Bank in eastern Iowa opened its fifth branch. The number of foreclosures the bank's had? Zero. Tightening its credit? Not at all.

"At the local banks, you don't see those problems. We're fine," said Mark E. White, the bank's president and CEO.

The bank was founded in 1907 and was one of the few in this area that made it through the Great Depression. It prides itself on being conservative in lending and knowing exactly how the loan is going to be used. Recently, as other banks allowed financing for homes up to 90 or even 100 percent of the home's value, the Farmers Savings Bank kept the traditional 80/20 rule, which means buyers had to have 20 percent of the down payment in cash. They kept all their mortgages in-house. During the real estate boom, they lost business to out-of-town banks, which offered better deals. Now some of those banks have folded and the customers are returning.

"We've been a little more conservative, which has really paid off," said Funke.

The Town the Economic Downturn Forgot (Washington Post 10/24/08)