There’s no denying the storied history of Northwest Bank & Trust Company in both the Quad Cities and the banking industry.
And a new dawn is coming. After 83 years in the Iowa Quad Cities and now with a fourth generation in the bank’s leadership, Northwest Bank is being sold to Time Bank. The deal, first announced in July, is expected to close at the end of the year.
Located in Park Ridge, Illinois, Time Bank also is family-owned and operated (with its own second- and third-generations in leadership). Much like Northwest, those leaders take great pride in being a community bank and in the fact that all its decisions are made in house.
Led by Chairman and CEO Tom Carter Sr., whose five sons are all in the family business, Time Bank’s bold move to purchase another bank is not a case of coming in and taking over. In an interview earlier this fall, Mr. Carter stressed their long road to finding a suitable bank to buy has led to the coming together of two similar, like-minded, family-owned and operated businesses.
“It’s not like an outsider coming in (and saying) ‘we’re going to do this’ or ‘we’re going to do that.’ That’s not the idea. It’s (the bank) already here. We’re going to add what we can add, and support development of who’s already here.”
“We’re a little bank. You could fit our bank inside this room,” Mr. Carter said while seated with two of his sons in the conference room of Northwest Bank Tower at NorthPark in Davenport.
Currently, Time Bank consists of a single banking location in Park Ridge.
In all, the five sons involved in Time Bank are: Joe Carter, 35, an executive vice president and the managing director, Strategic Initiatives; Sam Carter, 34, EVP and chief lending officer; Paul Carter, chief operating officer; Tom Carter Jr., a loan officer; and Mack Carter, who has one year in as a loan officer. Collectively, they have more than 65 years experience.
Community bank philosophy
“What we really were looking for was a bank that felt like us. That’s why we liked Northwest Bank & Trust,” Tom Carter Sr. said.
They also admired Northwest’s history, legacy and way of doing business. “It feels like us to us,” he added. It’s a history that Mr. Carter and his family plan to continue to build upon.
He stressed how for the customers, the bank will still be the Northwest employees they know and trust. “We’re going to develop this market from this market.”
Yes, the Northwest Bank name will disappear and become Time Bank. The Northwest Bank Tower will undoubtedly boast the Time Bank name in the future. But the bank’s operation and culture and community involvement will remain.
Mr. Carter entered the banking business in Park Ridge, working as a commercial lender at a previous bank where his father Gene Carter was the longtime president. But when First State Bank & Trust Co. was sold to a national bank, it left a void in their hometown.
“It was the community bank in our town,” he recalled.
After National City bought the First State Bank & Trust Co., Mr. Carter found himself at a crossroads. “My dad owned a small part of the bank, but was not a major shareholder. At that point, it was a decision for me.”
He remembers telling his father “I don’t really like thinking in terms of being a banker. It just seems unappealing. I like the idea of having more control of what we could do, regardless of what business it was.”
So in 1995, the father-son team opened a community bank to compete as other consolidation was sweeping their industry. Over the years, he said “we did the community banking thing – we took care of the people that were in town.”
He added “We developed certain lending specialties that we could compete well at, which were dealing with small real estate investors and builders and, of course, small businesses.”
In fact, when the global financial crisis hit, he said “We had done fewer stupid things than others” and had successfully broadened their reach.
“My father was the opposite of greedy, which is really important,” Mr. Carter recalled.
Unlike many competitors, they never stopped lending even as the crisis worsened. “What really hurt people then was when their banks … would stop projects mid-construction. You cannot pay back your loan if they cut your ability to complete the project, so we jumped in and completed projects … and increased our niche in that kind of market.”
Those decisions, Joe Carter, the eldest son, said, “were a big factor in the long run. We didn’t stop lending.”
Sam Carter recalled how then a few of them were interning at the bank. “I remember all the people who came in at the time that had been burned by their previous banks,” he said, which drew him into the lending side.
New name, gamechanger
In the past decade, the Carters saw their customers begin to split their time between their hometown and other warmer climates – often doing business from two locations and tackling investment projects in far away geographies. “So we started dealing more with those same people but in more locations,” the senior Mr. Carter said.
That led to the need for a more universal name and the decision to change their name from Park Ridge Community Bank to Time Bank. “We wanted to make sure our name was not an obstacle to people… The Time Bank name has made a big difference,” he added.
With his five sons working at the bank, he said they began to focus on planning for the future. “We wanted to keep developing it, which of course, means making it better in every way we can,” Tom Carter Sr. said.
The Carter sons admit they probably pushed harder for the expansion as it impacts them in the long term.
And in early 2021, their search for a bank to acquire began. Together, the Time Bank leaders discussed with the QCBJ the difficulty in finding the right match especially with so many under-performing banks for sale.
“We were looking for someone who had their act together – not a turnaround situation,” the bank’s CEO said.
“It was very appealing to find a bank that was successful,” added Sam Carter, the bank’s EVP. “From our first conversations with Joe (Slavens) and Adam (Pelzer), it felt it was such a good fit and that’s a huge thing.”
Joe Carter added “We knew how to judge this because we had been looking for a long time. Joe and Adam, and just Northwest Bank stood out.”
Local leadership retained
Maintaining the existing local leadership also was a key factor in sealing the deal, Tom Carter Sr. said. “What’s our way of coming here and not being the outsider? It’s through people, obviously. The whole thing of us not being a serial acquirer is coming in without coming in. (This is Time Bank’s first bank acquisition.) The fact that Adam wanted to stay, we were very impressed.”
Mr. Pelzer, Northwest Bank’s executive vice president and fourth generation of the Slavens’ family leadership, will serve as Time Bank’s market president in the Quad Cities and EVP when the deal is approved and completed later this year or early next.
As part of the transaction, Northwest Investment Corp. will retain ownership of its investment management group and other subsidiary companies. Joe Slavens will continue to lead the family’s interests as president of Northwest Investment Corp., which is the parent company of the rebranded Tower Trust & Investment Co., Centennial Tax & Accounting, River Cities Development (the towers’ owner) and Stratman Solutions, a banking software company.
The sale also does not include the bank’s iconic office towers in Davenport and Bettendorf.
But Time Bank has purchased Northwest Bank’s Locust Street branch and has signed long-term leases to remain in the bank offices in the towers.
Asked why not expand with more branches local to Park Ridge, Tom Carter Sr. said for real growth, it was necessary to make an acquisition. “We are one bank with one location – we’re like four guys and a truck,” he joked. “So our desire to improve, develop and grow exceeded our capacity to do it organically.”
He added “It’s no secret, it’s really hard to grow customers organically. They have to be in a crisis mode to really look for another bank. “You’re dealing with people when they’re in a big transition moment – selling a business, buying a business (or) something happened.”
Time brings lending power
Time Bank’s motivation to grow coincided with Northwest Bank’s decision in 2021 that it needed a new strategy itself if it was to remain in the community banking business.
In a QCBJ interview last summer, Mr. Slavens said his institution’s leadership recognized that a lack of access to more capital would impact its future ability to compete and grow. “We didn’t have the financial capacity to stay in the game,” he said. “We either had to obtain that financial capacity or step into a partnership with someone who has that capacity.”
An increased lending capacity, Mr. Carter said, is one of the biggest resources that Time Bank’s ownership will bring to its new market. “Our legal lending limit is larger, so we can take care of some customers that would bank here but they don’t, maybe because they can’t borrow as much money as they need to.”
Currently, Time Bank has $475 million in assets, but after the deal is completed it will be at $700 million in assets. The acquisition includes $225 million in total assets and liabilities of the $245 million Northwest Bank.
Asked if Northwest customers will feel a difference, Mr. Carter said “I hope not. I really don’t want them to feel a lot of change other than positive things. Adam’s going to have a lot of practical impact on what’s done here, what’s not.”
For customers, Mr. Pelzer said the transition should be seamless. “Most things our customers interact with are the same exact products (at Time Bank). It’s the backend system that allows the bank to operate that is changing … and because of where they (Time Bank) are in their development journey, we’ll pick up new products.”
He said today’s customers’ needs are not what they were 20 years ago. “Because we’ve been entrepreneurial, we’ve been successful on a variety of fronts. But the lending limit has been a headwind for us for quite awhile.” Admittedly, he said they have had customers outgrow them.
Tom Carter Sr. says the key is to “eliminate reasons for people to leave you.”
In addition, he said Time Bank brings the additional capital necessary to do “what everybody has to do to be a really good bank. You have to be able to hire, maintain and keep people who are aggressive …”
It also has the financial means to keep current with ever-changing technology and other costly, operational needs.
Joe Carter, who described himself as the “cheerleader for growth,” said: “We’re investing in the bank into the future. There’s a lot to do, it’s super exciting and even though (banking) is an ancient business, there is a lot of opportunity.”
HISTORY: Born in an area known as “Germantown” in what then was the northwest corner of Davenport, Northwest Bank opened its doors at 1529 Washington Street on July 7, 1941, with three employees. Founded by a group of residents of German descent, the bank was formed to serve legions of new German immigrants and others who were making Davenport their home.
In 1953, the first generation of the Slavens family joined the bank leadership. In 1964, the Slavens made their first investment in the bank.
BANK FIRSTS: In 1968, Northwest would introduce customers to a “motor bank.” Located at 38th and Brady streets, what we simply know now as a drive-thru was opened to service Davenport’s fast-growing commercial area north of Duck Creek.
A year later, it would establish a trust department then known as Investment Management Group.
Northwest also would expand into the office real estate business with construction of its nine-story bank tower in 1974 at the then new NorthPark Mall (and later build its twin in Bettendorf). The bank even would make local history in early 1981 by introducing the Quad Cities’ first drive-up ATM, located at its Bettendorf branch.
In 1982, Northwest would build a new six-story office building in downtown Davenport, marking the first major office building to be constructed in the downtown in nearly 50 years. But soon after, the farm crisis hit and downtown struggled. Still despite the financial burden, Northwest maintained the location there for two decades.
In 1996, it entered the software business with Bank Sweep Manager, which still is used in the bank today – and serves more than 500 community bank and credit union clients.
THE SALE: On July 24, 2024, Northwest Investment Corp., the parent of Northwest Bank & Trust Co., and Time Bank jointly announced Time Bank would acquire Northwest Bank. Time Bank will purchase the approximately $225 million in total assets and liabilities of Northwest Bank.
The sale does not include the iconic office towers at NorthPark Mall and Bettendorf. As part of the agreement, Northwest’s EVP Adam Pelzer will stay on with Time Bank and be an EVP and the market president in the Quad Cities.
WHAT’S NEXT: As part of the bank’s sale, the Slavens family’s Northwest Investment Corp. is spinning off its other subsidiaries and retaining their ownership. Those companies include: River Cities Development, which owns the two bank towers;Centennial Tax & Accounting; Stratman Solutions, a nationwide provider of financial services software solutions; and the bank’s trust and investment group, which will become Tower Trust & Investment Company.
