M&S Bank celebrates birthday with year-long party

Published: Friday, January 23, 2009 at 6:01 a.m.
Last Modified: Thursday, January 22, 2009 at 11:24 p.m.

HAWTHORNE - M&S Bank is an oddity in the banking world, growing to 12 branches with $384 million in assets without ever merging with or acquiring another bank in its 50-year history.

The bank celebrated its birthday with a reception Thursday evening in the place where it all began - the Hawthorne branch. Each branch will host a similar reception with one a month through the year.

"I think it's a significant statement in today's banking environment to have one bank in continuous operation for 50 years serving the same communities. That's kind of rare today," said President and CEO Tom Mallini.

While large national banks are merging and hemorrhaging stock value, Mallini said M&S is still growing. Since M&S is primarily a business bank, growth has slowed, however, as retailers, builders, restaurants and service companies face flat or negative sales.

"We didn't get involved in derivatives or subprime lending or any exotic assets," he said. "We're just plain vanilla. Loans and deposits. Know your customer. We were always a conservative lender."

The bank started in 1959 as the Bank of Hawthorne in a building on the same location with about 30 feet of frontage that formerly housed a clothing store and gift shop.

Mallini said a number of local residents chartered the bank with about $500,000 in capital.

Former dairy farmer William Carlton, an original shareholder, said Hawthorne hadn't had a bank since the Hawthorne State Bank failed in 1932. His parents lost what little they had at the time.

He credited attorney and entrepreneur Edgar Johnson as the driving force behind starting the bank - and also a golf course.

"Everybody said he was crazy, but we went along with it," Carlton said.

Pat Stroud, the longest tenured employee at 36 years, recalled some of the founders who opened the bank while she was at Hawthorne High School, including retired Col. R.B. Baker, contractor Frank Worley, farmer James Phillips and developer Al Killian.

With the opening of the Melrose branch in 1981, the bank became Lake Area State Bank.

Stroud said she drove the money bags to start the branch in her van as part of a convoy from Hawthorne to Melrose on the first day. She is now an assistant vice president in commercial lending at the Main Street branch.

Gainesville real estate agent, banker and restaurateur Dennis O'Niel bought the bank in 1984, changing the name to Merchants & Southern Bank.

In his first two years, he opened branches in High Springs, Ocala, Gainesville and Keystone Heights, and hired Mallini.

Mallini said the bank had $12 million in assets when he came on board in 1985.

After opening two more branches in Gainesville in the 1990s, M&S has opened two more in Ocala and two in Gainesville in the past four years.

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