Saturday, April 7, 2007

Banking historically an important industry in U.C.

by Claudia Johnson, editor
Cumberland Business Journal

The oldest continuously operating bank in the Upper Cumberland appears to be First National Bank (of McMinnville), established in 1874 by Warren County native William H. Magness. However, there are a number of other 19th and early 20th century banks that have survived depressions, recessions, mergers and a plethora of changes in the region’s financial climate.
In 1807 the Bank of Nashville was the first state bank established in Tennessee, operating until its failure in 1819. Two more attempts at establishment of a state bank failed, but in 1838 eight branches were created by an act of the Tennessee legislature, one of which opened in 1840 in Sparta. Although it survived the Civil War, the Sparta branch closed in 1866 along with all the state banks in Tennessee. No other banks organized in White County until January 1885 when the Bank of Sparta was chartered, bolstered by coal mining and the success of the railroad. Soon shareholders wanted a connection with the national bank, and in December 1886 the First National Bank opened. The bank operated until the late 1980s when it merged to become part of Dominion Bank, the first in a number of mergers.
Bank of Hartsville was established on April 21, 1884, and has undergone several name changes, including Community First, AmSouth and currently Peoples State Bank of Commerce. Another old Trousdale County bank, The Citizens Bank (Hartsville), celebrated its 100th year in 2006.
Jackson Bank & Trust began as the Bank of Whitleyville in 1916. On Aug. 31, 1933, the Bank of Whitleyville changed its name to the Jackson County Bank and opened its main office in Gainesboro. On Dec. 20, 1934, Jackson County Bank purchased Security Bank & Trust Company of Gainesboro. In July 1995 Jackson County Bank changed its name to Jackson Bank & Trust, preparing the bank for expansion into Putnam County.
Red Boiling Springs Bank opened July 1, 1919, with a paid-in-capital of $12,500 and 56 stockholders. During the construction of the branch in Lafayette, which opened in 1965, the name of the bank was changed to Macon Bank & Trust Company. In October 2001 Macon Bank acquired a branch office of Union Planters Bank in Celina.
Citizens Bank (Lafayette) was organized under state charter on April 10, 1909, and incorporated for $12,000. There were 83 original stockholders who each purchased $100 or $200 worth of stock. A Red Boiling Springs branch opened in 1977. In 1987 a branch was opened in the Siloam Community but was moved to Westmoreland in 1994. In 1986 the stockholders voted to form a one-bank holding company, Citizens Bancorp, which purchased the stock of Dale Hollow Holding Company. Dale Hollow Holding Company owned all of the stock of the Bank of Celina, and the two banks merged in 1987. In August 1993 Citizens Bancorp purchased the assets and liabilities of Smith County Bank from SunTrust Bank of Nashville.
Citizens Bancorp purchased the majority interest in Liberty State Bank, DeKalb County's oldest bank, in July 1999. Liberty State Bank traces its origin to the Bank of Liberty, formed in 1898 by A. E. Potter, the father of the late J. Edward Potter, founder of Commerce Union Bank of Nashville. In 1918 the Bank of Liberty and American Savings Bank merged into Liberty Savings Bank, which remained open during the Great Depression. Edgar Evins, father of Congressman Joe L. Evins, obtained an interest in the bank, with the family leading it until April 1969 when J. Roy Wauford, Jr. acquired the Evins' interest. At that time, the total assets of the bank were slightly more than $1.3 million. In February 1973 the name was changed to Liberty State Bank and in November 1973 the first branch opened in Alexandria. In March of 1982 First National Bank of Lebanon was acquired by Liberty State Bank. Current assets are in excess of $96 million.
Early Putnam County banks were the Bank of Cookeville, which operated from 1890-1910, Peoples Bank (1906-1911) and The Cookeville Bank (1911-1914). Farmers State Bank was organized in 1910 but never opened. The Bank of Algood existed from 1910-1930. Baxter Bank and Trust Company operated from 1906-1932. Bank of Buffalo Valley survived from 1912 until 1926. Buffalo Bank organized in 1919 but did not open. At some time in the 1920s the Bank of Monterey had a branch near Wilder in Fentress County called the Bank of Laurel. Union Bank and Trust Company was formed in 1922 and merged into Bank of Monterey in 1931.
The oldest surviving bank in Putnam County originated as Bank of Monterey in 1901. In 1976 it merged with Bank of Cookeville (established 1968) and became Bank of Putnam County. First National Bank of Cookeville (established 1910) became part of First Tennessee in 1972. Citizens Bank (established 1914) was acquired by Union Planters (now Regions Bank) in the 1980s. Those three were the only banks to survive the 1930s depression and were the only banks in the county from the 1930s until 1968.
James W. Dorton founded First National Bank of Crossville in 1900. When he died at the onset of the depression, his son Moses E. Dorton was only 20 years old, rendering him legally underage to operate a bank. Special legislation declared him legally of age, and the youngest bank president in the state continued in his position for 55 years. Four generations of the Dorton family were at the helm of the bank during its existence. It was the only bank in Cumberland County for six decades. In 1960 Highland Savings and Loan and Cumberland County Bank (now part of Bank of Putnam County) opened. First National Bank of Crossville sold in 1987 to Union Planters but continued to operate under its own name and charter until 2000, when it finally adopted the Union Planters name.
Jamestown’s Union Bank was established in 1933, the result of a merger by Bank of Jamestown (1904) and Farmer’s Bank (1922). Currently the bank employs 45, has resources in excess of $153 million and operates a main office in Jamestown, a branch in Clarkrange and mortgage offices in two locations.
Citizens Bank (Carthage) opened in Oct. 26, 1929, and the stock market crashed three days later. But the bank survived the Depression, has expanded with nine offices in Smith, White and Putnam counties, has never merged and remains the largest independent bank in its service areas with $450 million in assets and a capital of $65 million, according to W. G. Birdwell Jr., whose father, Walter Birdwell, Sr., organized the bank with 59 original stockholders and original capitalization of $30,000.
Overton County’s oldest bank, Union Bank & Trust Company, was chartered on Oct. 25, 1932, and formed by the uniting of Old Farmer's Bank and Citizen's Bank with capital stock of $50,000.
In Cannon County both Braxton and Gassaway had early banks, neither of which remain. The first bank organized in Cannon County appears to be the Bank of Woodbury, which opened Feb. 11, 1888. It was purchased by local investors in 1941 and the name changed to Bank of Commerce. Later it was purchased by Union Planters Bank who recently sold to Regions Bank who currently operates it today.
Van Buren Bank in Spencer began circa 1906 with D. L. Haston owning 50 percent of the shares.

Author's note: The information contained in this article was provided by various individuals throughout the Upper Cumberland at the request of the CBJ. According to CBJ research, no comprehensive history of early U.C. banks exists, and this Legacy series installment is not presented as such.

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