New Market Bank Celebrates 90th Anniversary of FHLBank System

last updated on Monday, September 12, 2022 in Community News

Originally published in the September 8, 2022, issue of, "Be Involved," a weekly e-newlsetter from BankIn Minnesota.

Authored by Anita Drentlaw, Bob Vogel, Tom Hazlett

We know a thing a two about longevity in banking. Since our founding in 1905, we have been a true community bank built on relationships with our customers and our communities. New Market Bank has been owned and operated by the Vogel family since 1913 and a couple of years ago our fifth generation began working as a student teller. We showed up during the difficult times and celebrated community milestones. We made it through and will continue to thrive because of the relationships we have with partners we can trust.

One of our most trusted partners is celebrating a big milestone! This year marks the 90th anniversary of the Federal Home Loan Bank System. Even after 90 years, the FHLB Des Moines of today is not so different at its core. The Bank is still all about providing lenders like us access to safe, sound and reliable capital so we can lend locally and foster a vibrant Minnesota economy.

An important part of any successful economy is the availability of suitable housing. In 2020 and 2021, New Market Bank saw the highest mortgage loan origination volumes we have seen by two, maybe three-fold. Our customers were actively re-financing to take advantage of low rates and save on their mortgage payment in the midst of the uncertainty of the COVID pandemic. We could not have taken care of as many customers as we did without the FHLBank’s Mortgage Partnership Finance® Program. The MPF® Program offers a streamlined process that allows us to retain control over the underwriting, closing and funding processes, giving us the ability to close significantly more loans than we would have if we were using other investors. The MPF team has really become part of our team and I value the partnership and customer service I find with the Program. Being on a first name basis with the folks at FHLB puts my mind at ease because I can walk away from a conversation with a definitive answer and reassurance I have a good loan. MPF is our primary outlet. We have worked with them for 20 years and we don’t see it changing anytime soon.

While our mortgage operations team was busy with re-fis, the rest of New Market Bank was devoted to the distribution of PPP loans. As a bank, we initially determined we would shoot for $5M in loans. By 11:00 AM on the first day the loans were available, we hit that ceiling. We ended up taking applications until federal PPP funds ran out, ranging from a $900 loan to single owner business to a $5M loan to a company with dozens of employees. Each loan, no matter the amount, was critical to that business’ survival and every New Market Bank employee from the processers to the front-line employees running checks to cars were committed to our customers and our communities. Our response to the COVID pandemic exemplified who we were and how important customers and our communities are to us.

During the pandemic, when we didn’t know what would happen next, FHLB Des Moines stuck with us. The FHLBanks didn’t pull back their line, in fact, at the start of the COVID crisis advances increased by about 25%. It’s difficult to name one other liquidity source, except for the FHLBanks, that worked exactly how they were supposed to work. When the entire world was changing, we knew we had a partner in FHLB Des Moines.

The 11 FHLBanks were created at the height of one crisis, and today, continue to provide stability amid another one - just as we have done through every market cycle for the past 90 years. The FHLBanks have proven that their cooperative model works. The true value of FHLB Des Moines is its stability, even in the most challenging times. And one day, if our current student teller decides she wants to pursue a career in banking, FHLB Des Moines will still be there as her reliable partner.