A Publication of WTVP

Better Banks Chairman and CEO Steve Backlund believes in making business personal. "Because we're independent and owned locally, we have to live with the decisions we make. It becomes more than protecting a financial investment; it also is a matter of protecting quality of life, our community, schools, and neighborhoods. We have personal relationships with the people we serve. Those personal relationships can't help but influence the decisions we make or the way we do business," he said.

Backlund has been with the Better Banks, which now includes Bartonville Bank and Dunlap Bank, since 1979 and has held the titles of chairman and CEO of Farmers State Bank in Astoria and State Street Bank & Trust Co. He graduated from Richwoods High School, conducted undergraduate work at the University of Northern Colorado and the University of Denver, and attended the University of Wisconsin School for Bank Administration.

Backlund's community service has included the Jaycees, Lakeview Museum, American Red Cross, Rotary, Children's Home, and WTVP Channel 47.

He and his wife, Tomi, have two children and reside in Peoria.

Tell about your background: schools attended, family, etc.

I was raised in Dunlap and Peoria and attended Richwoods High School. I attended the University of Northern Colorado, where I met my wife, Tomi. I then moved to the University of Denver to pursue a BA, specializing in accounting. After college, we were married, and I worked in the retail industry for several years in Colorado. I transferred to manage a store in Idaho before moving back to Peoria to join Dunlap Bank in 1979. Tomi and I have been married for 27 years; she's been an elementary school teacher in Colorado, Idaho, and Dunlap Grade School prior to the birth of our children. Since then, she's been very active in local charities. She chaired the Susan G. Komen Race for the Cure for an unprecedented three years, and I'm very proud of her for that. We have two children: Tera, 20, and Eric, 15.

There are several banks in your "group" or holding company. Explain the history of acquiring each of the other banks.

My father, Chip Backlund, came from a very poor family in Nebraska. His father died when he was 14 years old, and he had to help support the family. He worked his way through school. My mother, Jean, was a teacher and helped pay his way through law school. He later became involved in banking as a national bank examiner and developed a method to purchase the Dunlap Bank in 1957 with other investors. We lived in Dunlap before moving to Peoria.

Chip was contacted by many different banks about purchasing them over a 25-year period. After looking at them and their philosophy, he felt only a small number of them fit with his philosophy. He organized the purchase of Glasford Bank in 1965, State Street Bank & Trust Company in Quincy in 1966, Wyoming Bank and Trust Co. in 1967, Bartonville Bank in 1970, and Farmers State Bank, Astoria, in 1979.

Much of the ownership among the banks was very similar, so a couple of years ago we combined all of the holding companies into one: Backlund Investment Company. Last year, we combined Bartonville Bank and Dunlap Bank because there was so much overlap in the market of these two banks, and we saw it as a good opportunity to better serve our customers with more locations and services. This combination also will make it easier for a potential future expansion within the city of Peoria.

Technically, the two banks are now one, but most of our customers and employees still think of them as separate. That's why we use the bank's new name of Better Banks, but still continue to use the "Bartonville Bank" and "Dunlap Bank" names in our marketing.

What makes the Better Banks-i.e. a community bank-different from a national or regional bank?

In terms of product offerings and technology, like all banks, there's very little difference. We typically haven't been involved in loans in excess of $5 million, but that will change, as we've developed a strategic alliance that will allow this to happen. Our difference really is in customer service and personal attention. Until you're a customer, you really don't understand or believe how great the service can be. I believe we have more of a vested interest in the communities we serve, so we're very careful how we treat its people-our customers.

To me, by choosing to always remain locally owned and independent, we're making a statement, a commitment to the area. Because of this, the ownership, management, and profits are a part of the local community. In the long term, this will have a profound effect on a customer's relationship with the bank. I think we become more answerable to our customers. We make the policies and decisions right here; we never are put in the position of looking to an out-of-state holding company for answers. I think there's a comfort level for customers to be able to walk into the bank and talk to the president or chairman if they want to.

Are there plans to acquire more community banks?

There's nothing we're currently working on, but if an opportunity presents itself, we'd definitely consider it. We're very proud of what we've put together, so when we're contacted by another community bank that wants to sell, it would have to be a good fit philosophically for both of us.

How can a smaller, locally owned bank provide better service to businesses and individuals in the area?

First of all, I think being smaller is an asset; it gives us the opportunity to be more creative with our products and our service. It allows us to look at challenges and opportunities on an individual basis and come up with a solution that works well for everyone. Many situations are unique, and not only our ability to be creative, but also our willingness, is often what makes or breaks a deal for a customer.

Everyone strives for personal service, but to us, it goes beyond just the ability to call someone by name. It's the commitment and responsibility you share with people when you have commonality with them. I never get tired of hearing customers-or friends of customers-tell me how much they enjoy doing business at our bank. And, fortunately for me, it happens frequently. They appreciate the care, diligence, and personal touches their requests are given.

The biggest reason for this is our employees. Our management team is outstanding, and they've put together an incredible team to offer this type of service to our customers. I'm extremely proud of this.

We've been able to retain our employees for a very long time, with the average length of employment among our employees almost 12 years. This speaks volumes about what type of company we are. Our customers really appreciate the consistency we have in our employees. Even with the employees who've left us, many come back after working at several other businesses because of everything we have to offer.

As your father, Chip, was chairman and is still involved in the Better Banks, did you always know your career would be in banking?

At first, when my father asked me to come back and work for the banks, I declined. I was young, and I wanted to do things on my own. He told me there was a position for me at Dunlap Bank, but he couldn't hold it indefinitely. That's when I was working in retail and dealing with an interesting mix of managing people and learning lessons in customer service. I think you take something with you from each experience, and I know my work in retail influences the way I look at customer service at the bank.

Tomi and I contemplated the move for about six months before we decided I owed it to my father to try the banking business. I decided to commit to five years because I wanted to really give it a fair chance. I also thought if it didn't work out, I'd still be young enough to try something else. That was 25 years ago, so I guess it's safe to say it was a good move for us-and I hope for the bank too.

How has banking changed since you entered the field?

The changes have been staggering, especially for an industry that had been so status quo for much of its history. When I started in 1979, rates were on their way up. They skyrocketed, reaching their peak in 1981. The prime was around 12 percent when I started and was 20 percent in six months. It was a very different time in banking. Chip told me at the time that banking used to be fun and a lot easier.

Banking has become more consolidated and, at the same time, branched out into non-traditional financial products and services over the years. Other players have entered the banking services arena-insurance companies, credit unions, brokerage firms, etc. Branching, both by local institutions and out-of-town banks, has become commonplace. Margins have been reduced dramatically, and regulation has added tremendous costs. Product delivery has expanded via the ATM, telephone, and the Internet.

We've been able to maintain our core values throughout all of these changes. One of my goals and our challenges is maintaining these values in the future. I strongly believe we can accomplish this.

Tell about your hobby of sailing. Do you sail on the Illinois River?

My main interest in sailing is racing. This started for me in 1981 on the Illinois River at the IVY Club. My wife and I and two or three good friends raced almost every weekend from May until October for almost 20 years. In the beginning, we practiced often, attended courses, and read about strategy. To be successful at racing, you must really focus and concentrate on many different events happening at the same time. This really showed me how competitive I am. We were quite fortunate and finished every season in either first or second place. It was a lot of fun, and we all enjoyed it.

I also used to play a lot of tennis and was an "anti-golfer," thinking it was a sport for old men. I guess I've achieved that status because the golf bug has definitely bitten me.

What steps are necessary to preserve the Illinois River?

First of all, let me say I think it's imperative that we preserve the Illinois River and Peoria Lake. It's a great asset to the Peoria area-not to mention the importance to our ecosystem. I'm not an expert in this area, but I know the Heartland Water Resource Council, among others, is working hard to assess, develop, and implement a program for preservation. It's important we all support the effort.

How do you see banking changing in the next decade?

I'm sorry to say it could well be the continued consolidation of more banks into larger and larger financial conglomerates. All of us who're committed to remaining locally owned and independent must work together, letting our legislators know the importance of hometown banks in our communities in central Illinois. Our legislators must also level the playing field for banks to compete with credit unions-not through anything extraordinary, but just by everyone adhering to the same rules, regulations, and taxation requirements.

I foresee banking becoming even more impersonal and more of a commodity by offering discounted services to the masses-where people are a number, and decisions are made solely on a formula-all in order to cut cost. I see this as a great opportunity for us to serve that portion of the marketplace where face-to-face, personal relationships are important in the decision of where one does his banking.

How did you recruit Jim Les to be the spokesman for your bank?

When Jim and his wife, Jodi, moved to town, they came to our bank to open their accounts. The staff was unaware that he was the new Bradley University men's basketball coach. Once senior management let me know they'd become customers, I called Jim and asked how he liked our bank. Jim told me he and Jodi had banked at a lot of banks, and this was truly the best bank they'd ever experienced. He was very happy this was his bank. I asked him if he would be interested in being our spokesman. He said he'd been approached by several other businesses about being a spokesman and had declined, but he said it would be very easy to be our spokesman because of the experiences Jodi and he were receiving at our bank. He went on and on about what a terrific bank we are. I told him I wish we had recorded that conversation, as that was a terrific ad for us.

When Jim did his first TV commercial for us, our ad agency wanted to create a script for him, but I told them to just let Jim say what he feels in his own words. That's exactly what he's done in all of the ads he's done for us. That's one of the reasons Jim comes across so well.

What was the best piece advice your father gave you about your career?

He gave me advice in two areas. First, he said maintaining a local bank in the community by remaining locally owned and providing excellent service at competitive prices are the governing factors that dictate our strategy-not high earnings. Secondly, reward long-term employees. We're fortunate to have a very stable work force and have set our profit-sharing plan to generously reward long-term employees.

What would you like our readers to know that hasn't been asked?

We're extremely conservative in how we manage the bank. Our investment portfolio is the most conservative (and safe) in the country. This means we aren't going to be the bank that makes the most money, but we'll be extremely safe. This conservative management gives us the ability to weather a long financial storm. So we're here to stay now and in the future. IBI