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August 2006
Still the Best Little Bank in America?
By Casey Jacobus

Granite Falls is a small town in southern Caldwell County with a population of about 5,000 people. It is named for the nearby waterfall on Gunpowder Creek, which was first used to power an iron works and later a cotton mill. The town’s history dates back to before the Revolutionary War when it was known by several names, including Bard’s Forge, Catawba View, Lovelady, and Summerville, before being incorporated as Granite Falls in 1899.

In October of 1906, a group of Granite Falls residents decided to start a bank in their community. They invested $8,000 and obtained a charter to organize Bank of Granite. Two months later when the bank opened, Ms. Lula Hickman, a Sunday school teacher, was first in line to make a deposit. On opening day the bank’s deposits totaled $901.68.

This year Bank of Granite is celebrating a century of solid service to its community. The bank’s operations have grown to 277 employees in 21 offices in seven North Carolina counties, with assets of $1.1 billion and 52 consecutive years of increased cash dividends for its shareholders. And, while the times and technology has changed, Bank of Granite’s commitment to customer service, community, and helping neighbors remains deeply embedded in its tradition and culture.

“We believe in building relationships,” says Bank of Granite Chairman and CEO Charles Snipes. “Through the years we’ve been the bank that has been willing to work with entrepreneurs to establish companies and help them grow and be successful. I am personally working with the third generation of management in several local companies. Our dedication to the community never changes.”


Building credit

In 1906 Theodore Roosevelt was president of the United States, a first-class stamp cost two cents, an earthquake destroyed 75 percent of the city of San Francisco, and the Ford Model N was America’s most popular car. Not many Granite Falls residents could afford the $500 for a new Ford, though; and the town was still mostly dependent upon the horse and buggy. That may have been part of the reason residents wanted a bank in their hometown. Little did they imagine that they were also establishing a bank that would serve the western half of North Carolina for the next hundred years.

Warren Buffett has called Bank of Granite “the best-run bank in the United States.” U.S. Banker Magazine agreed. Bank of Granite has been featured in Forbes Magazine and in an Eye on America segment during the CBS Evening News. It has received the top business-friendly ranking in North Carolina in a report by the Small Business Administration’s Office of Advocacy. In 2005, it received the SBA’s Community Bank of the Year Award for North Carolina.

However, the bank’s first 48 years, from 1906 to 1954, were rough ones and the bank fought just to survive during difficult times. The very year after the bank was founded, a national financial crisis known as the Panic of 1907 hit the country. In 1914, when World War I began, the dollar shot up and stock and bond prices collapsed. In 1916 devastating floods hit Caldwell County wiping out whole communities. After the war, terrible inflation gripped the country’s economy. On October 23, 1929, the stock market collapsed and the Great Depression began. With the loss of $30 billion, many community banks across the country failed. Then came Pearl Harbor in 1941 and the U.S. entered World War II.

After all the tragedies, disasters and problems, Bank of Granite’s fortunes sagged and its owners decided to sell the bank in 1954. A group of Caldwell County citizens rallied and bought the bank. The new directors brought in John Forlines Jr. as president and chairman of the board. Forlines, a 1939 graduate of Duke University and later the Stonier Graduate School of Banking at Rutgers University, had wide business and financial experience, including four years as a financial officer with the army during World War II.

When Forlines joined Bank of Granite, it had just one office and total resources of just over one million dollars. It was almost the smallest bank in the state – ranking 223 out of 225. Forlines’ mission was to grow the bank – to strengthen its financial services, to help strengthen the economy of the area, and to make the bank profitable for its new owners.

Forlines was a remarkable man whose leadership and vision built one of the country’s best known, most profitable and strongest community banks. He orchestrated Bank of Granite’s first expansion into Lenoir in 1959, which set the stage for future growth. In 1969 the original Granite Falls office was relocated to its modern Main Street facility. The next year Bank of Granite opened its first Hickory office.

Forlines’ own prominence in the banking world also grew. He served as president of the North Carolina Bankers Association and held a number of high level positions with the American Bankers Association. In March of 1980 he appeared on the cover of United States Banker and was featured in the lead article. But, he also shared his talents and leadership with the community, serving on the boards of First Presbyterian Church of Lenoir, the Caldwell County Chamber of Commerce, Catawba Valley Executives Club, North Carolina Citizens for Business and Industry, and Caldwell County Hospice. He headed the campaign to raise $1.6 million to build the civic center in Caldwell County.


Investing in people

In September 1982, Forlines made perhaps the bank’s best acquisition of all time when he persuaded longtime competitor and friend Charles Snipes to join Bank of Granite as executive vice president and chief administrative officer. Snipes, a native of Lincolnton, N.C., had a resume not unlike Forlines’. He, too, was a graduate of Stonier Graduate School of Banking, as well as Lenoir-Rhyne College in Hickory, and had served three years in the U.S. Army Security Agency. A senior vice president of First Union National Bank when First National and First Union merged in 1981, Snipes was on the brink of starting his own bank when Forlines convinced him to join Bank of Granite instead.

“I was ready to launch a new bank to serve the Hickory, Conover and Newton area,” says Snipes. “I had the investors and the people all lined up and I knew that in three to five years the new bank could be very successful. But with Bank of Granite, I knew I could make a difference from the very beginning.”

Forlines told his board he wanted Snipes to have the same authority he had. He allowed Snipes to grow the bank and to make changes where they were needed. Over the next 24 years, the two leaders grew the bank to 21 offices and over one billion in assets together.

“We became a great team,” says Snipes. “We both believe community banks can make a difference in terms of positive growth in the community, by keeping small to medium businesses profitable, by helping our neighbors and by building relationships.”

Snipes believes that a community bank is more flexible and able to respond to customers more quickly than its bigger competitors. Longtime customer Steve Mull, former owner of an independently owned and operated grocery store in Hickory, got that kind of flexible response when he requested a loan from Bank of Granite in the early ’80s.

“I went through an extremely difficult time in my profession,” says Mull. “I needed a loan to go forward or I was going to have to file for bankruptcy. Although I didn’t have the assets to do what I wanted, I did have a strong business plan. Charles Snipes said he believed in me and gave me a ‘character loan.’’’

With the loan he got from Bank of Granite, Mull was able to turn his business around and was later honored as “Small Businessman of the Year” by the Catawba County Chamber of Commerce.

“Bank of Granite is more than just a bank,” says Mull. “All the success I have had, I give credit to Charles Snipes and Bank of Granite.”


Paying back

Customer service is at Bank of Granite’s core, its legacy and its top priority for each employee in each office, regardless of title or office location. Snipes sets the standard by keeping an open office door and answering his own phone when his secretary is away from her desk. He also calls each bank employee twice a year – on his/her birthday and on the anniversary of their date of hire.

“Bank of Granite is a very special place to work,” says Snipes. “We are truly a family here. It’s a good heritage; it makes people proud of where they work and determined to continue the legacy.”

At Bank of Granite, community service is more than a single project or something that’s done once a year; it’s ingrained in the culture. Employees sit on many nonprofit boards and participate in dozens of community activities including Rotary Club, Habitat for Humanity and March of Dimes. They also put in hundreds of volunteer hours through mentoring and tutoring to students in schools throughout their communities. The bank achieved 100 percent participation in its 2005 United Way Campaign resulting in record pledges. Snipes sets an example for his staff by serving on a variety of nonprofit boards in Hickory and the Catawba Valley region, including, among others, the Boy Scout Council, the Art Center of Catawba Valley, Catawba Valley Community College, Lenoir-Rhyne College, and the Catawba Science Center.

In addition to celebrating its centennial in 2006, Bank of Granite is also experiencing a change in leadership. In January 2006, after 52 years with the bank, John Forlines Jr. stepped down as chairman and now serves as chairman emeritus. Snipes’ role was proportionately increased to include chairman in addition to president and CEO.

Centennial activities at the various bank offices are scheduled throughout the year with seasonal festivities where customers are welcomed with food, fun and prizes. The culminating event will be held October 12, celebrating the day Bank of Granite was chartered, when the community is invited to Town Square in Granite Falls for the burial of a time capsule.

“It’s because of our customers, our shareholders, and dedicated employees that we’re celebrating 100 years,” says Snipes. “And it will be because of them when we celebrate our next 100 years.”

Snipes expects Bank of Granite to continue to grow by expanding into high growth markets. The bank made its first acquisition in July 2003 and entered the Charlotte-area market with three offices; Uptown, SouthPark and Lake Norman/Cornelius. A lending office in Matthews became the fourth Mecklenburg County full service office in 2005. The bank is preparing to open a lending office in Statesville this summer, its first in Iredell County, and is applying with the FDIC and the North Carolina Commissioner of Banks to convert the office to full service.

“You can’t stand still in any business,” says Snipes. “While we don’t want to grow too quickly, our strategic plan is to look for the growth markets. We can grow to assets of two or three billion and still be a community bank, if we don’t lose what brought us here.”

As the bank continues to grow, Snipes says it will need to change its infrastructure and embrace the latest technology. But, to stay true to its vision of community service, it must also attract and retain the best available talent.

“It is all about people,” says Snipes, who affirms that the bank aggressively recruits the best candidates to head up new offices. “We’ve been fortunate to hire great people who understand our history, philosophy and culture and can continue to operate in the same tradition.”
Casey Jacobus is a Lake Norman-based freelance writer.
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