It tells the story of Ken Hale and BOM Bank, both haling originally from Montgomery, Louisiana.

Ken inherited 10 percent of Bank of Montgomery when his grandfather, Kent Wardlow, passed away in 1994. Its balance sheet that year showed $18 million in assets.

Since then, Ken moved the bank’s headquarters to nearby Natchitoches, established a holding company, changed its name to BOM Bank, expanded into Texas, grew the bank’s balance sheet to $1.5 billion in assets, and accumulated 40 percent of its outstanding stock.

It is an American success story.

Ken also happens to be one of the strongest on-camera personalities you come across in banking. He’s confident, funny and irreverent. He’s also a sharp banker, obsessed with risk and efficiency.

I hope you enjoy the film.

Sincerely,

John

It was three months ago that I arrived in Alabama to begin making documentaries about banking that portray the industry as I see it: A colorful, multidimensional landscape populated by hard-working people, each with a story to tell.

The story you’ll find here is no exception. It is the story of J. Chad Jones and First Bank of Alabama — the oldest continuously operating bank in the state, tracing its roots back to 1848, when a local merchant, James Isbell, began providing banking services.

This story has the added benefit of taking place in Talladega, a town known for its 2.66-mile superspeedway, “the biggest baddest racetrack on the Nascar circuit.” It’s only fitting that branding is a priority at First Bank of Alabama. It is “the imperative foundation for profit,” says Chad.

I hope you enjoy the story.

Till next time,

John

PS Thank you to my new and old friends in Alabama — John Ramage, Brad Bolton, Chad Jones and Dave Hedges — as well as those in Louisiana — Ken Hale, Mark Marionneaux, Preston Kennedy and Scott Gaudin — who have been along for the ride. “Friendship isn’t about whom you’ve known the longest,” I once read. “It’s about who walked into your life, said ‘I’m here for you,’ and proved it.”

In Montgomery, Louisiana, it’s the Wardlow family. In Red Bay, Alabama, it’s the Bolton family. Further down the state, in the tiny town of Brundidge, it’s the Ramage family.

The Ramage family traces its banking roots to 1904, when James T. Ramage founded the First National Bank of Brundidge.

The bank remained in the family’s hands for the next 116 years, though complications with Ramage’s estate enabled self-interested executers to control, and nearly squander, the bank for decades until Ramage’s great grandson, Jimmy Ramage, stepped into both his inheritance and the bank in 1969, returning control to the Ramage family.

This video is the second in the Troy Trilogy, a series of stories that came from my visit to Troy, Alabama. It tells the story of James T. Ramage and the First National Bank of Brundidge, which sold in 2020 to Troy Bank & Trust, which collaborated with me on this project.

Thank you to Troy Bank & Trust and the Ramage family.

Sincerely,

John

Our video today is part of a three-part series from my visit to Troy, Alabama.

Troy Bank & Trust was founded in 1906 by a group of Troy businessmen. Among them was a man named Charles Henderson, a scion of Alabama history and reputed at one point to be the state’s richest man.

Henderson recapitalized Troy Bank in the Great Depression in exchange for a controlling interest — 51.12% of its stock, to be precise. Upon his death in 1937, that interest was placed into perpetual trust under the terms of Henderson’s will, which also prohibited it from ever being sold or, according to subsequent court interpretation, even diluted.

Henderson’s will also dictated how the money from the trust would be spent. It accumulated for the first twenty years to care for Henderson’s widow. It then accumulated for a second twenty years to build schools throughout Pike County. Finally, after accumulating for twenty more years, it would be spent to eradicate polio. Because polio had already been eradicated by the time that clause ripened, the money was used instead to build a childhood healthcare clinic that today offers services, irrespective of ability to pay, to children across Pike and eight neighboring counties.

The name of the trust is: Trust Number 3 Under Will Charles Henderson. If you look on the FDIC’s BankFind Suite, you’ll see it’s the ninth-largest bank holding company headquartered in Alabama, with $1.5 billion in assets. Today, the income from the trust (i.e., bank) subsidizes the Charles Henderson Child Health Center and could some day, folks believe, finance the construction of a hospital.

The net result is that Troy Bank & Trust is one of the most unusual stories in banking. A bank that can’t be sold. A bank whose purpose is to subsidize the provision of healthcare to thousands of children across nine Alabama counties.

Today’s piece, created in collaboration with Troy Bank & Trust, delves into three of the extraordinary stories I came across in my visit to their city.

The first is the story of Mayor Jason Reeves and the City of Troy. Mayor Reeves will soon become the longest-serving public official in the City of Troy at the age of only 53 — he was elected to city council the year after graduating from Troy University. You will find Mayor Reeves to be an elegant spokesman on issues germane to his city as well as on deeper issues, like those of race.

The second is the story of Jeff Kervin, the CEO of Troy Bank & Trust. Jeff takes us through the unusual history of Troy Bank, as well as that of Charles Henderson, whom we’ll expand on in a subsequent video.

Finally, the third is Dr. Jack Hawkins, Chancellor of Troy University. What Dr. Hawkins has built at Troy University can only be believed and appreciated in person. He is a testament to how much a person with purpose can accomplish in one life.

Next week’s video will be the second in the Troy Trilogy: James T. Ramage and The First National Bank of Brundidge.

See you then, friends.

John

Today you will find the first in a series of long-form documentaries on banking across the country.

Bankers tend to be disciplined and reticent. They don’t like to make noise. And so we’ve been left to wonder who they are and how they live.

This documentary series pulls the curtain back. It delves into their lives and reveals who they truly are.

And who are they?

It’s easy if you live in a coastal city, as I do, to not realize what’s happening across the vast expanse of middle America right now. Towns are being hollowed out. Downtowns abandoned. Parks unmaintained.

And one of the principal catalysts is the ongoing consolidation of community banks. This is not to say that consolidation is evil. This is a free country. People can do as they wish. But the thoughtful amongst us will look back and regret not fighting harder for the people in these places.

That’s what the bankers profiled in this series do — they fight for others, not just themselves.

No one personifies this more than Brad Bolton, the CEO of Community Spirit Bank in Red Bay, Alabama.

On the surface, Brad and I couldn’t be more dissimilar. He tucks polo shirts into nicely pressed khaki pants; I dress like a twenty-two year-old wannabe YouTuber. He’s refined, polite and religious while I’m perceived as eccentric and unpredictable.

But we both bleed the same blood.

We both get, on a visceral level, how important these institutions are to these towns and these people. It’s one of those things you can’t unsee.

And so it is my pleasure to present to you The Boltons of Red Bay.

I trust you will find, as I did, a sincere and hardworking family that is fighting every day for their bank, their town and their country.

Next Sunday is the Old Country Banker, the story of Ken Hale.

Sincerely,

John

What is it that enables a small minority of banks and bankers to perform consistently through all stages of multiple credit cycles?

That’s one question that has motivated my study of the American banking industry. And it’s a question that I will answer in a series of documentary-like stories about banks and bankers from across the country — from the deep south, up to Alaska, and many places in between.

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We’re gonna do another whirlwind book review. This time covering 20 or so books about community banks.

There are banks in here from across the country. Alabama. Alaska. Arkansas. Georgia. Illinois. Kansas. Louisiana. Montana. Nebraska. Oklahoma. Tennessee. Texas. Virginia. Washington. And Wyoming.

A few failed. Others merged into larger institutions. Some have remained independent.

All are good stories.

Here’s the list:

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A silent force lurks behind every financial boom and bust.

It rarely makes headlines or is debated on cable news. But when it moves too far or too fast it can induce mania or cause economic collapse.

That force is money itself. Its supply. Its flow. And who controls it.

This is the essence of monetarism.

Let’s start with a story.

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How big of a threat to bank deposits are stablecoins?

Treasury Secretary Scott Bessent tweeted recently that stablecoins could absorb as much as $3.7 trillion worth of U.S. Treasuries. If half came from checking or savings accounts, that would equate to 10 percent or so of total U.S. deposits.

Bessent wasn’t trying to be precise with his estimate. Nevertheless, it remains a good question: How will stablecoins impact bank deposits?

To get us in the ballpark of an answer, let’s look back on a time when the banking industry faced a similar threat with the introduction of money market funds in the 1970s.

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Banking is probably the only industry in the world where you can hide your cost of goods sold until there's some sort of downturn.

Bill Demchak, Chairman and CEO of PNC Financial

Good morning friend,

Today we’re talking about one of the most unusual characteristics of banking. It’s what I call the opaque cost of goods sold.

This is a critical concept to appreciate how banking is unique from other industries, as we’ll see in today’s video with a short case study.

It’s easiest to understand the concept of an opaque cost of goods sold if we compare banking to a typical business model — say, a bookstore.

When a bookstore sells a book, it knows immediately estimate its gross margin. It’s simply what it sold the book for less what it paid for the book.

The same is not true in banking.

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One of the most important issues in banking right now concerns stablecoins and the related Genius Act.

The Treasury Secretary predicted recently that $3.7 trillion worth of U.S. Treasuries could be absorbed by stablecoin demand.

This seems auspicious. Given perpetual government deficits, we need all the additional demand for government debt that’s possible.

But there’s an unintended consequence to a shift even half this large.

It has to do with the deposit multiplier.

We discuss below and in today’s video the significance of this concept to the stablecoin issue.

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A common trait among extraordinary bankers is the insatiable quest to learn. But in a literature as large as banking, where does one begin?

In today’s video, we review the book that I most commonly recommend for first time readers in the genre. It’s a biography of Jamie Dimon written by Duff McDonald, titled Last Man Standing.

Best,

John

Today we look at one of the things that renders banking most unique: the infinite demand for credit.

It’s this unique peculiarity of banking that makes discipline in the good times one of the principle characteristics of high-performing banks.

I hope you all have a wonderful day,

John

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We look in the video above at the similarities in banking between the 1920s, the 1980s and today. Doing so helps put today into perspective and, for many bankers, will reaffirm what they already believe to be the most prudent way to manage through a time like this.

Sincerely,

John

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In a college commencement speech a decade ago, Mick Blodnick, the former CEO of Glacier Bancorp, observed that the biggest difference between successful people and unsuccessful people is that successful people never stop learning.

You see this in every discipline. Great musicians study great musicians. Great athletes study great athletes. Great writers study great writers. And I would tell you that, in my experience, I’ve found that great bankers study great bankers.

But who to study?

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In our video today, we learn the story of Arkansas National Bank, or ANB Financial, one of the largest bank failures in early 2008.

ANB’s experience allows us to extract a simple framework for understanding when banks are most susceptible to the temptations that lead to trouble.

Tomorrow, we’ll add nuance to this framework.

Till then,

John

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Banking is like business in a pressure cooker. The unusual supply and demand dynamics of credit, combined with the amount and type of leverage that’s innate in banking, leaves a bank both uniquely prone to commit errors as well as acutely vulnerable to the consequences of committed errors.

“When assets are twenty times equity, mistakes that involve only a small portion of assets can destroy a major portion of equity,” wrote Warren Buffett in his 1990 shareholder letter. “And mistakes have been the rule rather than the exception at many major banks.”

One way to minimize mistakes is to have a sense for why they happen, which is what we introduce in today’s video.

See you tomorrow,

John

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We continue our conversation about periodization by introducing a model that better explains the topography of the past century in American banking.

Next week we’ll talk about liquidity destruction events — principally, bank failures.

Till then,

John

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We pick up today by looking at how the scholars of banking sorted the history of banking into eras for the purpose of identifying trends.

This sounds academic but it’s necessary to grasp if one wants to understand the megacycles in American banking.

Sincerely,

John

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We continue our overview of banking by explaining how the population of banks in the United States fell from over 31,000 in 1921 to nearly 4,000 today.

I hope you all have a wonderful day.

Seeya tomorrow,

John

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