Community Banker

Tom Schlueter’s people-first approach puts the community into Keystone Community Bank
Tom Schlueter is ready to get to work in front of the Keystone Community Bank’s downtown Kalamazoo branch.

One of the reasons Thomas Schlueter requires his employees at Keystone Community Bank to answer every phone call to the bank personally is because he remembers his mother’s calls to her bank.

“The third of every month, my mother called her bank to verify that her Social Security check had arrived,” Schlueter says. “She had Parkinson’s so it wasn’t easy for her to make the call. I’m really proud that we answer our phones personally here rather than using a recording, and when people come into the bank, we try to call everyone by name and take the time to chat with them.”

Schlueter’s parents, both emigrants from Hamburg, Germany, spoke English with a German accent, which meant they faced yet another communication challenge in their new homeland. Their son, who became president and CEO of Keystone Community Bank and vice president of Firstbank Corp., in 2005, says he thinks of them when doing business. Banking, he says, is not just about numbers. It’s about people. And that quality attracted Schlueter to the field.

Although he earned an accounting degree at Western Michigan University in 1978 (after attending Portage Northern High School), he has worked in banking for his entire career.

“During my days as a bank teller, I worked a drive-through window at Maple Hill Mall,” Schlueter recalls. “I learned about people during that time. A teller sees all sorts of customers, from the challenging to the great ones, and I enjoyed all of it. I learned that I wanted a job that has contact with people. That pushed me out of an accounting career.”

Schlueter was born in London, Ontario, but moved from Canada to the United States at age 5. The family of four (including his sister) first lived in New York, then moved in 1966 to Michigan, where Schlueter’s father worked for Fisher Body, a division of General Motors, until his retirement.

“We were doing well when I was growing up,” Schlueter says. “My sister and I grew up in a home that Mom and Dad worked to pay off. We had one TV and one car,” he adds with a smile, remembering a simpler time.

Schlueter was employed by First of America Bank/National City Bank for about 23 years. “I started working at First National Bank as a teller in 1976, while I was still in college, and then I took part in a management training program. I’ve always been good with numbers,” he says.

Prior to joining Keystone Community Bank, his last position at National City was as senior vice president and middle market lending group manager for Southwest Michigan. He served as executive vice president, in addition to being named chief operating officer and director of Keystone Community Bank in December 1999.

His banking background and desire to work with people led him to the idea of opening a new kind of bank. In 1997, 43 Kalamazoo business people gathered to discuss the idea of a community bank that would be more community-oriented than the big banks. Personalized service would be a top priority.

“It was a period of about 12 to 15 months when banks were going through all kinds of mergers and buyouts,” Schlueter says. “It was hard for people to keep track of all the changes in their banks. It was frustrating to many. Some of the banks were executing the changes better than others. These business people, they heard the grumbling in the community about all the changes, and they saw an opportunity. Keystone was about reaffirming the benefits of banking here at home.”

Keystone Community Bank opened its doors with $5 million in capital, Schlueter says. “But growth was good, better than we had planned, and in another three years we had raised another $5 million.”

In 2005, Keystone Community Bank joined Firstbank Corp., which gave it strong central support operations, with fiscal assets of $1.5 billion and more than 40 banking offices throughout central, southwestern and northeastern Michigan. In August, Firstbank Corp. merged with Mercantile Bank Corp. to become the third largest Michigan-based bank, with 53 branches statewide and almost $3 billion in assets. Keystone, however, maintains its local presence, with six branches in Kalamazoo and one in Paw Paw, and Schlueter remains president and CEO.

Despite the growth expected to result from the merger, Schlueter says Keystone will maintain its community-oriented focus. “I honestly feel that Keystone’s community-based philosophy has been historically very strong and will only strengthen further as the merger of our three banks is consummated,” he says. “Bigger can certainly take away from a community, but it doesn’t need to take away. In our case the same people are intact at our bank, and decision-making is left at the local level, and I really believe we’re going to have an even more significant community focus.”

With all the changes in the banking industry and the ups and downs in the national and local economy in the last few years, Schlueter has watched with interest the changing habits of bank customers. “People have definitely changed their saving and spending habits,” he says, “and that’s been good. People hunkered down for a few years. Debts are being paid off, and savings have increased. In the last six to 12 months, however, we are seeing spending pick up again. There’s been a lot of refinancing of homes, and we are seeing purchasing activity again.”

That’s the strength of a community bank, Schlueter says. It knows its customers, follows their habits and responds. “People are more aware these days about the importance of buying local, about spending their dollar locally. Banking in your local community works the same way. The big banks stopped lending in certain areas because they were just looking at the numbers. We looked at the numbers, but we looked at the people too. A community bank can stay closer to its customer needs.”

Schlueter gets fired up when talking about credit unions. “It’s a struggle with credit unions,” he says. “They don’t pay federal taxes. We do. Credit unions have a strong lobby, but we’ve noticed some consolidation among credit unions too, as they become bigger. Competition is good, the more of it the better, but when one business pays taxes and the other doesn’t …” His voice trails off.

As he sits behind his desk in the corner office of the third floor, he overlooks the Kalamazoo Mall. And looking out from that vantage point, he reflects not only on the city but his place within it after many years in banking.

“Kalamazoo is a special city. The colleges are a big part of that,” he says, speaking of Kalamazoo College, Western Michigan University and Kalamazoo Valley Community College. He sits on the KVCC Foundation board, which supports college programs and scholarships, and also on the board of the consolidated United Way for Kalamazoo and Battle Creek and the Epic Center (Kalamazoo Cultural Center board.

Being involved in the community is important, Schlueter says. Keystone Community Bank holds food drives, participates in Art Hops and supports fundraising events and various local charities. It also sponsors a breakfast speaker series at Western Michigan University that brings WMU faculty, alumni and friends, and Schlueter (continued from page 22)
business leaders to speak to the community and share their insights and expertise.

“For a bank of Keystone’s size, we have given very generously to many nonprofits since we opened 16 years ago, including our participation in very successful United Way campaigns,” Schlueter says. “Not only have we given monetarily, our staff gives countless hours every month volunteering their time with causes such as United Way, Downtown Kalamazoo, Inc., Friendship Village, Vicksburg Community Schools, Gryphon Place, the Paw Paw Wine & Harvest Festival, to name a few, and I could go on and on.

“We try to support our community while also making this a good place to work for our staff. We have a high retention rate, and we don’t lose customers either. We know our customers by name, and you’ll find when you come in, we’re not always trying to sell you something.”

Schlueter isn’t the only banker in his family. He met his wife, Diana, working at First National. Their family includes Schlueter’s two adult children, Kevin and Laura, and Diana’s children, Ben and Jenny. “I enjoy spending time with my family,” Schlueter says, noting that they are getting ready to take a vacation to Europe for the first time.

The Schlueters’ European trip is a cruise and will not include a trip to his parents’ home in Germany, although that is a trip Schlueter would yet like to make. After all, the lessons he learned from his parents have kept him on track to success throughout his banking career.

“We will always answer the phone in person at Keystone,” he says. “It’s those little things that add up to exceptional customer service.”


The Strength of a Community Bank

. “People are more aware these days about the importance of buying local, about spending their dollar locally. Banking in your local community works the same way. The big banks stopped lending in certain areas because they were just looking at the numbers. We looked at the numbers, but we looked at the people too. A community bank can stay closer to its customer needs.”
--Tom Schlueter