Still your grandfather’s bank?

More than a century ago, in a room above a downtown Franklin pharmacy, a group of businessmen came up with an idea and drafted their plan.

The Mutual Building and Loan Association was born, with a goal of lending money with easy terms for people to buy a home or make an investment. The first loan totaled $600, borrowed to buy a home on Adams Street.

Now, 125 years later, now Mutual Savings Bank remains headquartered in Franklin and is the only bank still based here. But there have been changes, including becoming a state-chartered bank with shareholders, from a building and loan association owned by the people.

“We’re not one that says we’ll never change,” bank President Bob Heuchan said.

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The bank survived two world wars, the Great Depression, the recession and the years-long aftermath with by being conservative, but also diversifying.

In 1939, Mutual Savings had about $335,000 in mortgage loans, the largest chunk of loans they carried. Now, they have $94.5 million, broken up among commercial loans, mortgages and home equity and car loans.

Over the years, the bank has made changes to keep up with demand, such as adding checking accounts less than 20 years ago, Heuchan said. Now they are looking toward how to use technology more and better.

“If you don’t want a customer to go to someone else, you better offer them what they want,” Heuchan said.

But the business has kept some of their traditions, including safe deposit boxes, loan books for every mortgage that allow people to track exactly what they owe and passbooks for children’s savings accounts. Those are services customers still want, Heuchan said.

The focus has remained on Johnson County customers, living and doing business in Franklin and farther south.

Years ago, Mutual Savings had a branch in the Center Grove area, but it wasn’t as successful as the other branches, and customers struggled with access when road work was done along State Road 135, so it was closed in 1994.

At the same time, the bank needed more space in Franklin and built a new branch on North Main Street.

Another branch in Franklin Township closed due to the recession. And a branch in Edinburgh closed last year.

But locations on Jefferson Street and Main Street and at the Franklin United Methodist Community in Franklin and in Trafalgar and Nineveh have thrived.

Now, the bank is looking at facelifts for some of its locations and potentially adding an ATM in downtown Franklin.

Greenwood hasn’t been a focus area for Mutual Savings because it already had plenty of banking options, Heuchan said.

“We serve a good niche in this county. Would we like to be north, sure,” he said.

Despite of plenty of competition, including 13 banks in Franklin, Mutual Savings has maintained a strong customer base, Heuchan said.

Forty years ago, the organization was small with $25.6 million total asset size, compared with Franklin Bank with more than $125 million and Union Bank with about $100 million.

“We were always the little guy,” Heuchan said.

Now, those larger banks were bought by larger banks — Chase and Key banks, respectively. And in recent years, Mutual Savings Bank has held the No. 2 position for market share in the Franklin market, according to the FDIC.

“You’re biting the pie, but yet we’ve continued to maintain a respectable marketplace,” he said.

Bank leadership had to make strides differently from other banks.

They don’t have the budget for a large amount of advertising and marketing or to open lots of locations. So the branches have to offer something else, and they strive to have strong connections with customers, with low manager turnover and promoting good service, he said.

“I’ve heard people say we are their grandfather’s bank, and we do try to fight that image, but we have been successful in holding on to generations,” Heuchan said.

But they know they have to keep up with the services other banks provide, mainly in technology. And that’s an area Heuchan wants to improve in the coming years, including mobile banking, apps and person-to-person payments.

Customers want good service but might not come into bank branches as much. That already has been noticeable. Years ago, customers would line up at bank branches to cash their checks on Fridays. Now, with direct deposit, that doesn’t happen, he said.

The bank also has reached out to different types of customers, including commercial loans.

That has led to some losses, such as after the recession. But Mutual Savings didn’t struggle as much as other lenders, Heuchan said.

Banks with more of those loans were more exposed during the recession because those properties, especially residential development, lost so much value, he said.

But the damage wasn’t as much because Mutual Savings looked more closely into the developers and businesses they were lending to.

The recession still has an impact, such as when appraisals come in significantly low. The bank is still struggling with residential construction loans, when the home doesn’t appraise for as much as it cost to build it, he said. But the number of loans not being paid or being closely monitored has dropped significantly from a high point in 2010.

A big focus now is to make sure Mutual Savings stays relevant in the community and still remains conservative. The goal is to remain an independent bank while also pleasing customers, the community and shareholders, Heuchan said.

“You can’t sit still. In order to have longevity, you have to find balance,” he said.

By the numbers

Here is a closer look at Mutual Savings Bank:

125: years in business

5: branches in Franklin, Trafalgar and Nineveh

$600: First loan given out for a home on Adams Street

35: Employees

$94.5 million: Loans, including 49 percent commercial, 41 percent residential and 10 percent consumer

$335,855: Total loans in 1939

$25.6 million: Total loans in 1979

$30 million: Loans in 1990

SOURCE: Mutual Savings Bank

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Annie Goeller is managing editor of the Daily Journal. She can be reached at or 317-736-2718.